On Monday, the Indian government announced that India and the United Arab Emirates have begun conducting bilateral trade using their respective local currencies. 

The prominent transaction involved India’s leading refiner, Indian Oil Corp (IOC.NS), paying in rupees for a million barrels of oil procured from the UAE’s Abu Dhabi National Oil Company (ADNOC). This information was detailed in a statement from the Indian embassy in the UAE.

This development follows another transaction where 25 kg of gold, valued at approximately 128.4 million rupees ($1.54 million), was sold by a UAE gold exporter to an Indian buyer. 

This pioneering transaction, utilising the Indian rupee and the UAE dirham, indicates a considerable shift in global trade mechanisms. It stems from the Memorandum of Understanding (MoU) agreed upon during Prime Minister Narendra Modi’s UAE visit on 15 July.

Furthermore, India is exploring opportunities to establish similar local currency trade deals with various countries, aiming to enhance exports in the face of a declining global trade landscape.