India and UAE Aim for $200 Billion Trade by 2032: Local Currencies, Payment Links and Digital Currencies
India and the United Arab Emirates (UAE) held the 14th meeting of the India-UAE High Level Joint Task Force on Investments in Mumbai on 28 September 2026.
The meeting was co-chaired by India's Minister of Commerce and Industry and the Managing Director of the Abu Dhabi Investment Authority (ADIA, the UAE's large state investment fund).
Both sides agreed to speed up three money-related projects: settling trade in local currencies (rupee and dirham), linking their payment and messaging systems, and work on central bank digital currencies (CBDCs).
They set a goal of raising two-way trade to USD 200 billion by 2032. Trade stood at USD 101.25 billion in 2025-26, of which non-oil trade was USD 76.2 billion.
The meeting noted recent big UAE investments in India, such as Emirates NBD taking a majority stake in RBL Bank (about USD 3 billion) and a planned integrated aluminium complex in Odisha (about USD 11.5 billion).
Other plans discussed include a food park in Gujarat, an aviation hub at Dholera (Gujarat) and an Invest India office in the UAE before the end of 2026.
India-UAE Comprehensive Economic Partnership Agreement (CEPA)
The India-UAE CEPA is a trade deal that cuts or removes the import taxes (customs duties) that India and the UAE charge on each other's goods. It also opens up trade in services and supports investment. It was India's first big trade deal in over a decade and its first such deal with a Gulf country. You can think of it as a "fast lane" for goods and services moving between the two countries.
The CEPA and the BIT are the legal base on which the new USD 200 billion target is built. With lower duties already in place, the two countries are now focusing on making payments cheaper and faster so that trade can double by 2032.
Local Currency Settlement (LCS) Mechanism and Internationalisation of the Rupee
Local currency settlement means two countries pay for trade in their own currencies instead of routing the payment through the US dollar. An Indian buyer can pay a UAE seller in rupees, and a UAE buyer can pay in dirhams. This saves the cost of converting money twice (rupee to dollar, then dollar to dirham). It is also a step towards making the rupee a currency that the world uses more widely, called internationalisation of the rupee.
The task force asked for "timely implementation" of these same LCS and payment-link projects. Settling more trade in rupees and dirhams would cut costs for exporters and importers and help reach the USD 200 billion trade goal.
Central Bank Digital Currency (CBDC) and India's Digital Rupee (e₹)
A Central Bank Digital Currency, or CBDC, is money issued by a country's central bank in digital form. In India, it is called the digital rupee or e₹, and it is issued by the Reserve Bank of India. It is the same rupee you hold as a paper note, only in electronic form. Just like a ₹100 note, one digital ₹100 is a direct promise of the RBI, so it is as safe as cash.
At the task force meeting, India and the UAE agreed to speed up their central banks' work on CBDCs. A working bridge between the e₹ and the Digital Dirham could make remittances and trade payments between the two countries almost instant and cheaper, supporting the USD 200 billion trade target.
- Meeting: 14th India-UAE High Level Joint Task Force on Investments, Mumbai, 28 September 2026
- Trade target: USD 200 billion by 2032
- Trade in 2025-26: USD 101.25 billion (non-oil: USD 76.2 billion)
- India-UAE CEPA: signed 18 February 2022; in force 1 May 2022
- India-UAE BIT: signed 13 February 2024; in force 31 August 2024
- RBI-CBUAE MoUs on local currency settlement and payment links: 15 July 2023
- RBI-CBUAE MoU on CBDC cooperation: 15 March 2023
- Emirates NBD majority stake in RBL Bank: about USD 3 billion
- Integrated aluminium complex JV in Odisha: about USD 11.5 billion