India, Indonesia in talks for using local currency for cross-border trade: Officials

Sources in the Union Finance Ministry later said that India is in talks with the Central Bank of Indonesia on conducting trade in local currency. “This will be similar to the agreement with the UAE,” a Union finance ministry source said. On July 15, the Reserve Bank of India and Central Bank of United Arab Emirates signed a Memorandum of Understanding (MoU) to establish a framework to promote use of local currencies— Rupee and Dirham — for cross-border transactions.

Agreements with the UAE for interlinking the payments and messaging systems were also linked.
“There is a greater confidence among various nations about the digital public infrastructure of India. We are at every stage of G20 presidency proving that more and more countries are dealing with us on UPI, cross-border payments and real-time card recognition and local currency transactions,” the source added.

Earlier in the day, Union finance minister Nirmala Sitharaman held bilateral meetings with finance ministers of Indonesia and Canada as part of the G20 summit.

After launching the Minister’s level Economic and Financial Dialogue between India and Indonesia, Sitharaman said, “Since the adoption of India’s ‘Look East Policy’ in 1991, and the ‘Act East Policy’ in the subsequent years, there has been a rapid development in bilateral relations between India and Indonesia, both in commercial and cultural fields. Indonesia has emerged as India’s largest trading partner in the ASEAN region; our trade has increased eightfold since 2005 and it touched USD 38 billion last year.”

“The areas of cooperation include bilateral investment, financial services and infrastructure development, among others. For instance, India has developed expertise in digital public infrastructure. It can provide time-tested solutions for convenient and affordable digital payments, which can assist Indonesia in achieving its financial inclusion goals,” she added.

Union Finance Minister Sitharaman also met Canadian Deputy Prime Minister and Minister of Finance Chrystia Freeland on the sidelines of the summit. Freeland said that Canadian Pension Funds would be keen to explore investing in Indian Infrastructure Funds as India offers a stable investment climate.

The two ministers discussed continued constructive participation in building consensus on the G20 FinanceTrack work streams in light of the July G20FMCBG meeting and the summit. They also discussed the progress being made in the ongoing various trade-related negotiations between India and Canada.