Team Blitz India
DUBAI: In a significant move towards de-dollarisation, India is now using rupees to pay for gold imports from the United Arab Emirates. This move comes less than a month after oil bills from the UAE were settled by India in rupees.
The rupee settlement of trade between India and the UAE assumes much importance as it comes after the two countries signed an MoU in July 2023 to set up a framework to use their respective local currencies to settle bilateral transactions.
India’s total gold imports, for the first time, in nine months of 2023-24 was a staggering $35.95 billion. The volume is 26.6 per cent more than the same period for 2022-23 making India a lucrative market for gold exporting nations.
The gold import data is vital as this comes at a time when India’s total merchandise imports in April-December 2023 were down 7.9 per cent year-on-year at $505.15 billion.
The de-dollarisation momentum between India and UAE is set to enhance further as the Emirati nation will now be using the same rupees to pay for some imports from India virtually making the trade between two nations independent of US treasury- controlled dollar.
As per government sources, UAE shall be using rupees to pay for its gems and jewellery purchases from India. Hastening the trade and commerce activity, India’s gems and jewellery exports are on an upward move. It rose by 14.1 per cent year-on-year in the last month of 2023 at $2.90 billion.
“Gold is coming through the advance authorisation route, mostly gold bars. It is then going out after conversion into jewellery. In some cases these are done by taking advantage of the Rupee Vostro account that the Reserve Bank of India (RBI) allowed in July 2022,” Director- General of Foreign Trade Santosh Sarangi said recently.
