An agreement to interlink the UAE and India’s payment systems to streamline cross-border payments has been praised as a primary contributor to increased remittance forecasts for 2024.

Ratified during the historic visit of Indian Prime Minister Narendra Modi to the UAE in February, the agreement linked the national payment platforms, UPI (India) and AANI (UAE), enabling the use of UAE dirhams and Indian rupees in cross-border transactions, thereby reducing transfer costs.

Ahead of presenting the latest budget, Indian Finance Minister Nirmala Sitharaman stated that this measure is forecast to improve the number of remittances coming into the country by 3.7 percent in 2024.

“India’s efforts to link its Unified Payments Interface (UPI) with source countries such as the UAE and Singapore are expected to reduce costs and speed up remittances,” she said.

In 2023, the UAE accounted for 18 percent of all remittance inflow into India, making it the largest single source.

Saudi Arabia, Kuwait, Oman, and Qatar collectively accounted for 11 percent of India’s total remittances, according to the World Bank.

In recent years, the UAE and India have sought to deepen economic and social ties, having signed a Comprehensive Economic Partnership Agreement in 2022, which drastically reduced tariffs and eased trade between the two countries.

UAE’s Minister of Economy, Abdulla bin Touq Al Marri, is expected to visit India this week to participate in the Investopia Global Talks held in Chennai.

Bin Touq will hold several one-on-one meetings with Indian ministers and government officials and is expected to explore opportunities to forge new partnerships at the government and private sector levels in logistics, advanced industries, entrepreneurship, SMEs, environment, and investment.

ALETIHAD