Ministry of External Affairs (MEA) Secretary (CPV & OIA), Ausaf Sayeed informed that India and Saudi have begun discussions on trading between both countries in national currencies and added that for this the proposals and consultations have been exchanged on Monday.
"The two sides have started discussing this. It is only at a discussion stage, that proposals and concept notes have been exchanged. The Saudi side is aware that we have worked out similar arrangements with other countries in the region. So, the discussions will be beginning or have already begun," Secretary Sayeed said.
In recent times, India has taken substantial steps to promote the usage of its national currency, the Indian rupee, in international transactions. Collaborating with banks from 22 different countries, India has established special rupee vostro accounts in domestic banks, facilitating trading in national currencies.
As India continues to expand its footprint in the global trade arena, the adoption of the LCS system with the UAE sets a precedent for innovative trade practices that can reshape the course of international commerce.
Banks from 18 countries have been permitted by the Reserve Bank of India (RBI) to open Special Vostro Rupee Accounts (SVRAs) for settling payments in Indian rupees, the government told the Rajya Sabha.
In response to a question from BJP's Sushil Kumar Modi, Union Minister of State for Finance Bhagwat Karad said SVRAs could be set up by banks of partner countries by approaching Authorised Dealer (AD) banks in India that may get permission from the RBI after the due procedure.
Earlier after the BRICS summit in Johannesburg, Foreign Secretary Vinay Kwatra said that discussions on trade settlements in national currency have been very positive within the BRICS framework.
India has recently started taking strong steps in trying to put structures in place before trade settlements in national currencies.
Secretary Kwatra also spoke on the India-Dirham rupee trade settlement mechanism with the United Arab Emirates.
"Most recently, a couple of months ago, we signed the India-Dirham rupee trade settlement mechanism with UAE. Now, India's trade with UAE is roughly 90 billion dollars, more or less balanced. It opens up a good opportunity for both India and the UAE to explore that space," he said.
Earlier, the President of the UAE and PM Modi on July 15 witnessed the exchange of MoUs between the Reserve Bank of India and UAE Central Bank for the establishment of a framework to promote the use of local currencies (INR-AED) for cross-border transactions and another one for the bilateral cooperation on interlinking their payment and messaging systems.
The signing of the Local currency settlement (LCS) agreement took place during the recent visit of Prime Minister Narendra Modi to the UAE.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Featured Video Of The Day
Sunita Williams, Barry Wilmore, In Space For 80 Days, To Return Next Year: NASA
PM Modi To Felicitate 11 Lakh New 'Lakhpati Didis' In Maharashtra Tomorrow UP Man Throws Hot Dal At Wife, Gives Triple Talaq As She Praises PM Modi, Yogi Adityanath PM Modi Arrives In Delhi After Concluding His Visit To Poland, Ukraine After "Brahmin Genes" Post, Bengaluru CEO's "Unapologetic" Follow-Ups Israel Attacks Lebanon In "Self-Defence", Hezbollah Responds With 300 Rockets Unified Pension Scheme Explained In 6 Simple Points Bangladesh's Ex-Textile And Jute Minister Golam Dastagir Gazi Arrested No Dalit In Miss India, Says Rahul Gandhi. Blame "Bal Budhi", Says Kiren Rijiju Man, 35, Arrested For Killing Wife, Child In Arunachal Pradesh Track Latest News Live on NDTV.com and get news updates from India and around the world.