Mumbai | India and the UAE on Monday agreed to take steps for the timely implementation of initiatives relating to settlement of trade in local currency, integration of payment and messaging systems, and central-bank digital currencies.
These issues are important as they have the potential to make bilateral trade and investment more efficient, accessible and resilient, the commerce and industry ministry said in a statement.
The matters came up for discussion during the 14th meeting of the India-UAE High Level Joint Task Force on Investments (HLJTFI) here.
The task force was set up in 2013 to promote trade, investment and economic ties. It acts as a forum to resolve issues faced by investors of the two countries.
It was co-chaired by Commerce and Industry Minister Piyush Goyal and Managing Director of Abu Dhabi Investment Authority (ADIA) Sheikh Hamed bin Zayed Al Nahyan.
"The co-chairs reviewed the progress made by the central banks of the UAE and India on initiatives relating to local-currency settlement, the integration of payment and messaging systems, and central-bank digital currencies. It was noted that these initiatives have the potential to make bilateral trade and investment more efficient, accessible and resilient. The two sides agreed to take steps to work together to support their timely implementation," it said.
The areas where two-way investment flows can be enhanced include energy, industry, logistics, infrastructure, technology and artificial intelligence, space, food security, agricultural innovation and the startup ecosystem.
"Civil aviation cooperation between Abu Dhabi and India was also discussed at the meeting, with the aim of enhancing air connectivity to support the broader economic relationship," it said, adding investment opportunities and collaboration in developing an aviation and logistics hub in Dholera (Gujarat) were also explored.
The bilateral trade has reached USD 101.25 billion in 2025-26. The non-oil trade touched USD 76.2 billion last year. The two nations have implemented a Comprehensive Economic Partnership Agreement (CEPA) in May 2022.
In August 2024, both partners implemented a bilateral investment treaty (BIT) with the aim of protecting and promoting investments.
As the UAE and India continue to work towards the shared ambition of USD 200 billion in bilateral trade by 2032, the two continue to expand investment cooperation across the sectors that will drive future growth, including energy, infrastructure, technology and AI.
"The two sides reviewed the work of CEPA's relevant subcommittees, discussed ways to further strengthen trade resilience in an increasingly complex geopolitical and economic environment," the ministry said.
Further, they reviewed the progress of several joint investment projects and areas of collaboration, including the Food Park project in Gujarat.
Both sides noted the expected operationalisation of Invest India, a national investment promotion agency, office in the UAE before the end of 2026.
India and the UAE noted recent Emirates NBD's about USD 3 billion acquisition of a majority stake in RBL Bank of India, and International Holding Company's USD 1 billion investment in Sammaan Capital of India, as well as a joint investment intent of USD 11.5 billion in the establishment of an integrated aluminium complex in Odisha.
They also noted the opening of Mashreq Bank, First Abu Dhabi Bank and Abu Dhabi National Insurance Company branch offices in GIFT City in India.
FINANCIAL SECTOR COOPERATION
In July 2023, the Reserve Bank of India and the Central Bank of the UAE signed two MoUs for establishing a framework to promote the use of local currencies (the Indian rupee (INR) and the UAE Dirham (AED) for cross-border transactions and for cooperation for interlinking their payment and messaging systems.
The MoU on establishing a framework for the use of local currencies for transactions is aimed at putting in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally. The agreement covers all current account transactions and permitted capital account transactions.
Creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-AED foreign exchange market. This arrangement would also promote investments and remittances between the two countries.
The use of local currencies would optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in the UAE.
Similarly, under the MoU on Payments and Messaging Systems, the two central banks have agreed to cooperate on linking their fast payment systems – Unified Payments Interface (UPI) of India with the Instant Payment Platform (IPP) of the UAE and respective Card Switches (RuPay switch and UAESWITCH).
They also agreed to cooperate on exploring the linking of payments messaging systems - Structured Financial Messaging System (SFMS) of India with the messaging system in the UAE.