Current Affairs 2023.Image Credit source: freepik
India and the United Arab Emirates (UAE) have recently signed an important agreement. How will both the countries benefit from this? For what purpose has this agreement been made? These questions can be asked in bank and staff selection commission examinations. In such a situation, candidates preparing for competitive examination should make notes of the answers to these questions given here, which can help them in preparation.
India and United Arab Emirates have announced an important agreement. Under this, both the countries will be able to transact in Rupee and Dirham. This agreement was signed on 15 July 2023 during Prime Minister Narendra Modi’s visit to UAE. Reserve Bank of India Governor Shashikant Das and UAE Central Bank chief signed the agreement. The central banks of both the countries will jointly develop the Local Currency Settlement System (LCSS), so that trade in Rupee-Dirham can be made easier and the exchange of US dollars between the two countries can be ended.
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What will be the benefit to both the countries?
This decision is going to have a positive impact on both the countries. Dependence on dollar will reduce. At present, payments in both import and export cases are being made in dollars. The trade between India and UAE for the year 2022-23 was $84.5 billion. After the new arrangement, both the countries will not have to make payments in dollars.
In fact, the dollar still dominates trade in the world. Currently, the dollar is being used most in international trade. In this way, the less dollar leaves the country, the stronger the rupee will be and the foreign exchange reserves will also become stronger. The dollars that will come from other countries will strengthen India. UAE will also get the same benefit.
UPIs of both countries will be linked together
Apart from this, two more financial decisions were taken on this occasion. One- India’s UPI will be linked to UAE’s payment system IPP. RuPay Switch and UAE Switch cards will also be linked together. This will make the exchange of financial messages between the central banks of the two countries easier and faster.
Let us tell you that three important factors work between the two countries. One-crude oil, two-economy and three-non-resident Indians. These are the three basic pillars. India was the third largest country to buy crude oil from UAE in the financial year 2022-23.
Its total share in India’s oil imports was ten percent. India has decided to increase its business other than oil to 100 billion dollars by 2030. UAE is currently the fourth largest investor country in India. UAE’s current investment in India is more than three billion dollars.