With this arrangement, the two countries allow trading in their own currency and payments to import and export trade at pre-determined exchange rate without bringing in a third benchmark currency like the US dollar, the official added.
The idea for the agreement was first mooted by Commerce and Industry Minister Suresh Prabhu and it was discussed at length in the sixth meeting of the UAE – India High-Level Joint Task Force on Investments held in Mumbai in October.
The commerce ministry was continuously pursuing the matter with the UAE authorities.
The ministry has also established a special UAE desk to facilitate investments and resolve issues relating to UAE Investments in India.
(With inputs from agencies.)