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India and the United Arab Emirates on Saturday signed pacts on use of local currencies for cross-border transactions and setting up a campus of the prestigious Indian Institute of Technology in Abu Dhabi, as Prime Minister Narendra Modi visited the country and met UAE’s ruler and President Sheikh Mohamed bin Zayed Al Nahyan.
This was Prime Minister Modi’s fifth visit to the UAE since he assumed office in 2014 — he was the first Indian Prime Minister to visit UAE in 34 years. Both leaders on Saturday said that “UAE-India relations have witnessed tremendous progress on all fronts”.
While the PMO called it a “productive visit”, Modi said, “It is always gladdening to meet HH Sheikh Mohamed bin Zayed Al Nahyan. His energy and vision for development are admirable. We discussed the full range of India-UAE ties, including ways to boost cultural and economic ties.”
The Ministry of External Affairs official spokesperson Arindam Bagchi said the visit set “a new landmark in bilateral ties”.
He said that the discussions touched upon a broad range of areas of bilateral cooperation, including trade and investment, fintech, energy, renewables, climate action, higher education and people-to-people ties.
The City
IIT-Delhi set to open a campus in Abu Dhabi, MoU signed (Page no. 3)
(GS Paper 3, Science Technology)
The Indian Indian Institute of Technology, Delhi, is set to open a campus in Abu Dhabi with an MoU being signed between the Ministry of Education and the Abu Dhabi Department of Education and Knowledge in the presence of Prime Minister Narendra Modi and UAE President Sheikh Mohamed bin Zayed Al Nahyan.
This will be IIT’s second international campus. Earlier, IIT-Madras had on July 6 signed an MoU to set up a campus in Zanzibar.
Education Minister Dharmendra Pradhan said in a tweet, “An exemplar of New India’s innovation and expertise, the IIT-Delhi campus in UAE will be an edifice of India-UAE friendship.
It will set a brand new template for leveraging the power of knowledge for both mutual prosperity and global good as envisioned in NEP.”
IIT-Delhi has already initiated outreach programmes for students in the UAE. Short courses and executive programmes for the industry are expected to start soon.
The institute said degrees will be offered starting 2024, details of which will be presented in due course. Courses at IIT Delhi-Abu Dhabi will cover several areas such as Energy and Sustainability; Art-ificial Intelligence; Computer Science and Engineering; Healthcare; Mathematics and Computing; and other disciplines of engineering, sciences and humanities.
Govt & Politics
Currency pact to promote rupee – dirham forex market (Page no. 6)
(GS Paper 3, Economy)
India and the United Arab Emirates (UAE) have signed a pact to establish a framework to promote the use of the rupee and UAE Dirham (AED) for cross-border transactions.
The MoU on establishing a framework for the use of local currencies for transactions between India and the UAE, aims to put in place a Local Currency Settlement System to promote the use of INR (Indian rupee) and AED (UAE Dirham) bilaterally.
The MoU covers all current account transactions and permitted capital account transactions,” the Indian central bank added. The deal was signed during Prime Minister Narendra Modi’s visit to Abu Dhabi.
The framework for the use of local currencies for transactions between India and the UAE aims to put in place a Local Currency Settlement System (LCSS).
The creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-AED foreign exchange market, according to the RBI.
This arrangement would also promote investments and remittances between the two countries. The use of local currencies would optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in UAE.
World
South Korea President arrives in Ukraine on Surprise visit since war started (Page no. 10)
(GS Paper 2, International Relation)
South Korean President Yoon Suk Yeol made a surprise visit to Ukraine, offering support for the invaded country in its war with Russia while demonstrating his own nation's cooperation with NATO.
Yoon's office said he travelled to Ukraine with his wife, Kim Keon Hee, following trips to Lithuania for a NATO summit and to Poland. It's his first visit since Russia invaded Ukraine in February 2022.
Yoon toured Bucha and Irpin, two small cities near Kyiv where bodies of civilians were found in the streets and mass graves after Russian troops retreated from the capital region last year.
He laid flowers at a monument to the country's war dead, before he sat down for a summit with Ukrainian President Volodymyr Zelenskyy.
South Korea, a key US ally in Asia, joined international sanctions against Russia and has provided Ukraine with humanitarian and financial support to Ukraine.
But the Asian nation, a growing arms exporter, hasn't provided weapons to Ukraine in line with its long-standing policy of not supplying arms to countries actively engaged in conflict.
Yoon began his statement with a mention of the UN forces' support of South Korea during the 1950-53 Korean War that helped repel a North Korean invasion.
Zelenskyy thanked Seoul for its “firm support of Ukraine's sovereignty and territorial integrity” and the “significant political, security, economic and humanitarian aid” it has supplied since the start of Russia's invasion.
Economy
RBI, CBUAE to set up LCSS for boosting trade, remittances (Page no. 11)
(GS Paper 3, Economy)
The Reserve Bank of India (RBI) and the Central Bank of UAE (CBUAE) signed two Memoranda of Understandings (MoUs) in Abu Dhabi to establish a framework to promote settle bilateral trade in respective local currencies, that Indian Rupee and UAE Dirham (AED) and interlinking payments and messaging system.
The first MoU, which on establishing a framework for the use of local currencies for transactions between India and UAE, aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally.
This will boost the trade between the two countries, it will be cost effective and the settlement will be much faster. The MoU covers all current account transactions and permitted capital account transactions.
Following the Russia-Ukraine war in 2022 and the sanctions imposed by western countries on Russia, the need was felt by many countries to reduce their dollar dependency for trade settlement.
The INR trade settlement mechanism that was introduced by RBI in July last year was a move in that direction. Today’s initiative to settle bilateral trade in respective local currencies takes the process forward.
RBI mentioned that the creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-AED foreign exchange market.