India-UAE currency swap for Rs. 35 bn or AED 1.8 bn ($496m) is expected to reduce dependency on hard currencies like US dollar and give push for local currencies of the two.

Now, both countries can make payments in their currencies without involving a third currency like US$. It may also reduce impact of volatility in exchange rates arising from such dependency.

According to Assistant Undersecretary for Foreign Trade Affairs in UAE, these and upcoming agreements in many areas will enhance and strengthen trade relationship with India.

Bilateral trade between UAE-India stood at $52 bn in 2017, of which non-oil economy comprised $34 bn. India’s FDI into UAE last year was $6.6 bn while that of UAE stood at $5.8 bn.

 The two are also cooperating in a big way in Energy Sector.