Rupee, dirham and UPI: India, UAE push cross-border trade without friction

India and the UAE have agreed to accelerate work on initiatives to settle bilateral trade in local currencies and integrate their payment and financial messaging systems, as the two countries seek to make cross-border trade and investment more efficient and resilient.

The agreement was reached at the 14th meeting of the India-UAE High Level Joint Task Force on Investments, co-chaired by Commerce and Industry Minister Piyush Goyal and Abu Dhabi Investment Authority Managing Director Sheikh Hamed bin Zayed Al Nahyan, PTI reported.

The two sides reviewed progress by their central banks on local-currency settlement, payment and messaging system integration, and central-bank digital currencies, and agreed to take steps to support their timely implementation, according to the commerce and industry ministry.


The initiatives are aimed at facilitating trade and investment by reducing transaction costs and settlement times and improving access to cross-border payments. The local-currency framework allows exporters and importers to invoice and settle transactions in Indian rupees and UAE dirhams, while also supporting the development of an INR-AED foreign exchange market.

The two countries are also working to link India's Unified Payments Interface (UPI) with the UAE's Instant Payment Platform and their respective card switches, RuPay and UAESWITCH. They are exploring the integration of India's Structured Financial Messaging System with the UAE's corresponding messaging system.

The discussions also covered ways to expand two-way investment in sectors including energy, infrastructure, logistics, technology and artificial intelligence, space, food security, agricultural innovation and startups.

Civil aviation cooperation was discussed as part of efforts to improve air connectivity, while the two sides also explored investment and collaboration opportunities around an aviation and logistics hub in Dholera, Gujarat.

India-UAE bilateral trade reached $101.25 billion in 2025-26, with non-oil trade at $76.2 billion, as per PTI. The two countries are working towards their shared target of $200 billion in bilateral trade by 2032.

The meeting also reviewed the implementation of the Comprehensive Economic Partnership Agreement (CEPA), which came into effect in May 2022, and progress on joint investment projects, including the Food Park project in Gujarat.

The two sides noted recent investments, including Emirates NBD's around $3 billion acquisition of a majority stake in RBL Bank, International Holding Company's $1 billion investment in Sammaan Capital and a joint investment intent of $11.5 billion for an integrated aluminium complex in Odisha.

They also noted the opening of branches of Mashreq Bank, First Abu Dhabi Bank and Abu Dhabi National Insurance Company in GIFT City.

The two countries expect an Invest India office in the UAE to become operational before the end of 2026.

The India-UAE High Level Joint Task Force on Investments was established in 2013 as a forum to promote economic ties and address issues faced by investors from the two countries.

India and the UAE signed two MoUs in July 2023 covering local-currency transactions and cooperation on payment and messaging systems. The local-currency agreement covers current account transactions and permitted capital account transactions, while the payment systems framework provides for cooperation between the two countries' financial infrastructure.

The UAE and India also implemented a bilateral investment treaty in August 2024 aimed at protecting and promoting investments between the two countries.