UAE and India discussing settling non-oil trade in rupees

UAE and India discussing settling non-oil trade in rupees

DAVOS - The United Arab Emirates is in early discussions with India to trade non-oil commodities in Indian rupees, Emirati Minister for Foreign Trade Dr Thani Al Zeyoudi said on Thursday.

The UAE signed a wide-ranging free trade agreement last year with India, which, along with China, is among the biggest trade partners for Gulf Arab oil and gas producers, most of whose currencies are pegged to the U.S. dollar.

Al Zeyoudi, asked by Reuters whether trade in rupees with India was on the table, replied "yes, we are in discussion with the Indians". The talks are related to non-oil commodities, he added.

"They are in the early stages," he said in an interview on the sidelines of the World Economic Forum in Davos.

The UAE's trade deal with India aims to increase bilateral non-oil trade to $100 billion in the next five years.

Other countries, including China, had also raised the issue of settling non-oil trade payments in local currencies, the minister said, but discussions were not at any advanced stage.

The large majority of Gulf trade is conducted in U.S. dollars but countries such as India and China are increasingly seeking to pay in local currencies for various reasons, including lowering transaction costs.

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