India and the UAE decided to continue discussions on creation of a payment mechanism for carrying out bilateral trade in national currencies instead of relying on hard currencies such as the US dollar or the euro at the meeting of the UAE-India High Level Joint Task Force on Investments in Mumbai on Tuesday.

The meet was co-chaired by Commerce & Industry Minister Piyush Goyal and Abu Dhabi Executive Council Member Sheikh Hamed bin Zayed Al Nahyan

“An important area discussed was the creation of a mechanism for carrying out bilateral trade in national currencies. Referring to the ongoing discussions between Reserve Bank of India and Central Bank of the United Arab Emirates on Unified Payment Interface as a common digital payments platform, both sides agreed to continue discussions,” according to a release issued by the Commerce & Industry Ministry.

The RBI allowed invoicing and payments for international trade in Indian rupee in July this year “to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR.”

India and the UAE have also decided to set up an `India Fast Track Mechanism in UAE’ to resolve issues faced by Indian businesses and investors in the country and also assist Indian companies in market entry and expansion.

This was decided at the tenth meeting of the UAE-India High Level Joint Task Force on Investments in Mumbai on Tuesday “In this context, issues pertaining to some Indian companies in UAE were noted and it was agreed that the UAE side will provide the necessary support to ensure speedy and mutually satisfactory resolution of these issues,” the release said

It was also agreed that the Indian side will provide the necessary support to the `UAE Fast Track Mechanism in India’, established in 2019, to ensure speedy resolution of pending issues and difficulties experienced by some UAE companies and banks operating in India.

The Joint Task Force was established in 2013 to promote trade, investment and economic ties between the UAE and India. This was the first meeting of the Joint Task Force since the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and unveiling of the Joint UAE-India Vision Statement in February 2022.

To encourage increased investment flows by UAE sovereign investment entities into India, the two sides reviewed UAE’s request for tax incentives to certain UAE sovereign investment entities under existing UAE-India Tax Treaty and India’s response to provide the same under the existing domestic tax laws of India. 

“It was agreed that bilateral discussions should continue to reach a mutually beneficial outcome which meets the policy objectives of both countries. In this context, the support provided to UAE sovereign entities through the Finance Act 2020 and subsequent issuance of notifications for tax exemption was noted and appreciated,” the release said.