India and UAE discuss mechanisms for carrying out bilateral trade in national currencies

Mumbai: India and the UAE have held discussions on the creation of a mechanism for carrying out bilateral trade in national currencies, an official statement said on Tuesday. It was discussed during the 10th meeting of the UAE-India High-Level Joint Task Force on Investments, held in Mumbai.

It was co-chaired by Piyush Goyal, Minister of Commerce and Industry, and Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi.

Referring to the ongoing discussions between the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates on a Unified Payment Interface (UPI) as a common digital payments platform, both sides agreed to continue discussions, it said. "An important area discussed was the creation of a mechanism for carrying out bilateral trade in national currencies," the statement added.

The two delegations also reviewed the status of the negotiations of the India-UAE Bilateral Investment Treaty. Twelve rounds of negotiations have been conducted to date.

"Both sides noted that much progress could have been achieved since the commencement of the negotiations, and therefore reiterated their commitment to accelerate the process for an early conclusion of a balanced and mutually beneficial agreement," it said.

Discussions also took place on ways of enhancing bilateral investments in key sectors like food security, manufacturing, infrastructure, energy, and technology.

"In this context, it was agreed that the concerned authorities in both countries will explore the establishment of efficient and integrated Single Window Solutions and Virtual Trade Corridors to reduce costs and time involved in trade and investment-related procedures," it added.

Further, it said as a means of encouraging increased investment flows by UAE's sovereign investment entities into India, the two sides reviewed UAE's request with respect to providing tax incentives to certain sovereign investment entities under the existing UAE-India Tax Treaty, and India's response to provide the same under the existing domestic tax laws.

It was agreed that the Indian side will provide the necessary support to UAE Fast Track Mechanism in India to ensure speedy resolution of pending issues and difficulties experienced by a number of UAE companies and banks operating in India.

It was also agreed that a similar India Fast Track Mechanism would be set up in the UAE immediately to resolve issues pertaining to the Indian investors in the UAE, and to assist Indian companies in market entry and expansion when investing in the country.