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India, UAE Sign Key Agreements On Trade Settlement In Local Currencies, Climate Change – 5 Points

India and UAE exchanged three MoUs for the establishment of a framework to promote the use of local currencies for cross-border transactions; bilateral cooperation on interlinking their payment and messaging systems; and for planning to establish IIT Delhi campus in Abu Dhabi.

PM Modi in UAE
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Prime Minister Narendra Modi held bilateral talks with United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan to further deepen the relationship between the two countries.

On the second day of his two-day tour, PM Modi visited Nahyan at the presidential palace of Qasr-Al-Watan where he was given a ceremonial welcome. 

Both the countries India and the UAE agreed to promote their local currencies for cross-border trade settlement and link the Indian Unified Payments Interface with the Gulf country’s Instant Payment Platform (IPP).

PM Modi mentioned after their meeting that since the two countries signed the Comprehensive Economic Partnership Agreement in 2022, India-UAE trade has observed a 20% rise and now with the trade settlement in local currencies will show stronger economic cooperation and trust between the countries. 

Major deals and agreements between India and UAE

1. Setting up IIT-Delhi In Abu Dhabi - On the educational front, the ministries of the two countries have decided to establish a branch of IIT-Delhi in Abu Dhabi. PM Modi took to Twitter to share this news and he said, "This marks a significant stride in our educational internationalisation and is testament to India's innovation prowess. Education is the bond that unites us, it's the spark that ignites innovation. Together, we will leverage this power for mutual prosperity and global betterment."

2. RBI and CBUAE signed an agreement - The Reserve Bank of India (RBI) and the Central Bank of UAE (CBUAE) signed two agreements in Abu Dhabi which would lay a foundation for cross-border transactions in local currencies and interlinking of payment and messaging systems. In the presence of PM Modi and President Zayed Al Nahyan, the two governors exchanged the agreements, informed the Reserve Bank said in a statement. According to a report by PTI, the memorandum of agreements (MoUs) is for "establishing a framework to promote the use of local currencies viz. the Indian rupee (INR) and the UAE dirham (AED) for cross-border transactions’ and ‘cooperation for interlinking their payment and messaging systems".

3. Promoting local currencies for cross-border transactions - PM Modi mentioned after their meeting that since the two countries signed the Comprehensive Economic Partnership Agreement in 2022, India-UAE trade has observed a 20% rise and now with the trade settlement in local currencies will show stronger economic cooperation and trust between the countries. 

4. PM Modi supports UAE's COP28 presidency - Modi congratulated the UAE for being selected as the host country of COP28 in 2023 and extended his full support to its incoming presidency of the climate conference. The Prime Minister thanked Sheikh Mohamed for the invitation to attend the COP-28. PM Modi reportedly said, "I am thankful for your invitation and I always look for the chance to come here. I have decided to attend the COP-28 Summit in the UAE." In the joint statement, both leaders urgently called upon the international community to expedite efforts in order to preserve the long-term goals of the Paris Agreement through the fulfilment of nationally determined contributions and the display of solidarity and support. 

5. Bilateral talks between PM Modi and President Zayed Al Nahyan - The Comprehensive Economic Partnership Agreement (CEPA)was signed during the COVID-19 pandemic gave a new push to the economic engagement between the two countries and a 20% rise in trade. Now India and the UAE are engaged across various sectors such as trade, investments, energy, food security, science and technology, education, fintech, defence, security, and robust people-to-people ties. PM Modi also expressed that Indians see the UAE president as a "true friend" and on Twitter, he wrote, "The manner in which ties between our countries have expanded, you have made a big contribution to that. Every person in India views you as a true friend."

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