India-UAE Trade Surges in Local Currencies, Setting New De-Dollarization Benchmark
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In a significant stride towards reducing reliance on the US Dollar, India and the UAE have announced that their bilateral trade settled in Indian Rupee and UAE Dirham has now entered 'double digits.' Union Minister Piyush Goyal confirmed this milestone on Monday, September 28, 2026, emphasizing the growing acceptance and understanding of the Local Currency Settlement (LCS) Scheme by businesses in both nations. This development is a clear signal of both countries' commitment to strengthening their economic ties and establishing a more resilient financial framework for cross-border transactions. This shift is part of a broader strategy to accelerate financial integration, with both countries actively working on linking their payment and messaging systems. The Reserve Bank of India and the Central Bank of UAE are pushing forward with integrating India Unified Payments Interface (UPI) with the UAE Instant Payment Platform (IPP), alongside connecting their respective card networks, RuPay and UAESWITCH. The aim is to cut transaction costs and settlement times, making trade more efficient and accessible for businesses while also fostering an INR-AED foreign exchange market. This initiative builds on the success of the Comprehensive Economic Partnership Agreement (CEPA), which has already seen bilateral trade reach USD 101.25 billion in FY 2025-26. Looking ahead, India and the UAE have set an ambitious target to double their bilateral trade to USD 200 billion by 2032, a goal that underscores the importance of these local currency mechanisms. The recent 14th High Level Joint Task Force on Investments meeting further explored expanded cooperation in energy, infrastructure, technology, and AI, with the UAE signaling an intent for an additional USD 25 billion investment in India. These ongoing efforts are poised to deepen economic partnerships and solidify a framework less susceptible to global currency fluctuations, marking a critical step in the global de-dollarization trend.