Current Affairs: To which country has India now paid crude oil in rupees? Know everything about this deal - Newztezz Online

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Thursday, August 17, 2023

Current Affairs: To which country has India now paid crude oil in rupees? Know everything about this deal

India has signed a crude oil deal with its third largest trading partner at Rs. India has made the first payment for this against the purchase of 10 lakh barrels of oil.

For the first time on August 14, 2023, India has paid the United Arab Emirates in rupees as the price of crude oil. Prior to this all payments were made in dollars. This is the first payment after the agreement signed during Prime Minister Narendra Modi's UAE visit last month. In this agreement, it was decided that with the intention of reducing the dependence on the dollar, both the countries would transact their currency in rupees and dirhams respectively.

The first payment has been made against the purchase of 10 lakh barrels of oil. According to media reports, this transaction has happened between Abu Dhabi National Oil Company and Indian Oil Corporation. This agreement between India and UAE took place on July 15, 2023. PM Narendra Modi and UAE President Zayed Al Nahyan were present on this occasion. After this, the central banks of both the countries had opened accounts to simplify the further process.

What will be the benefit of dealing in rupees?

Both the countries are going to benefit from this new initiative. There will be less dependence on the dollar. Its value too. Transactions in local currency are easier and less expensive. It also takes very less time. Under the new arrangement, the goods that India will import from UAE will be paid in rupees and the goods that India will export to UAE will be paid in dirhams. The central banks of both the countries are also making messaging systems to facilitate this payment and exchange of instant messages.

How is India's trade relation with UAE?

United Arab Emirates is the fifth largest supplier of crude oil to India. This is the second major country from where India imports liquefied petroleum gas (LPG). At present, India supplies chemicals, machinery products, seafood, clothes, tea, meat, vegetables, fruits, sugar, grains, pulses, gems and jewelry, metals, etc. to UAE.

The United Arab Emirates is India's third largest trading partner. Both the countries are doing trade of more than six lakh crore rupees. According to the financial year 2022-23, UAE has imported two lakh crore rupees from India. India has imported four lakh crore rupees from UAE. India has financial deficit with UAE because India imports more from there and exports relatively less. The import of crude oil has created this distinction.

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