A Reserve Bank of India (RBI) logo is seen inside its headquarters in Mumbai

Reserve Bank of India (RBI) is looking forward to having a meaningful digital payments cooperation with the United Arab Emirates (UAE), considering the significant number of Indians living in the Middle East country.

Gunveer Singh, who serves as Chief General Manager of the Reserve Bank of India's Department of Payment and Settlement Systems, said on the sidelines of the G20 Summit in New Delhi that RBI's cooperation with the UAE in digital payments is vital due to geographical proximity of both nations and the huge number of Indians in the UAE.

He shared that both countries have already taken a few steps forward in the digital payment area as they signed two Memorandum of Understanding to strengthen national currencies for bilateral trade and link payment and financial messaging systems in July 2023.

Indian Prime Minister, Narendra Modi and President of the United Arab Emirates, Mohammed bin Zayed Al Nahyan, witnessed the signing of the two Memoranda of Understanding between the RBI and the Central Bank of the UAE (CBUAE).

These agreements were signed to support increasing trade relations between the two countries.

The first agreement consists of the settlement of trade transactions in the two national currencies (the UAE dirham and the Indian rupee) while the second MoU enables both countries to benefit from the services of IPPs and local payment card schemes in the UAE and India.

Singh further shared that India's Unified Payments Interface (UPI) has achieved 10 billion transactions. Considering last month's transactions, the total number of UPI transactions was 10.58 billion.

The UAE and India started the bilateral trade using local currencies in August as they marked the first transaction of one million barrels of oil under the Local Currency Settlement (LCS) system.

The transaction took place between Abu Dhabi National Oil Company (ADNOC) and Indian Oil Corporation Limited (IOCL). The settlement took place in both currencies - Indian Rupees and UAE Dirhams.

Talking about the trade relationship between both nations, India is UAE's second-largest trading partner as it records 9% of total foreign trade and 14% of non-oil exports. Whereas, the UAE is India's third biggest trade partner.

The trade between both countries marked $72.8 billion in 2021, as per IBEF. This year, the trade between both nations is projected to surpass $88 billion.

Furthermore, the UAE officially joined the India-led Global Biofuel Alliance last month, after the Minister of Energy and Infrastructure, Suhail Bin Mohammed Al Mazrouei concluded his three-day visit to Goa, India.