(a) whether the Government has signed currency swap agreements with the United Arab Emirates (UAE), Japan and other countries without bringing in a third benchmark currency like US dollar;
(b) if so, the details thereof and the Government’s gain therefrom;
(c) whether the Government is expecting rise in exports and imports with these countries; and
(d) if so, the details thereof and the EXIM trade between India, UAE and Japan in the last four years?
THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY
(SHRI C. R. CHAUDHARY)
(a) & (b): As per the information received from RBI, the RBI has recently signed Bilateral Currency Swap Agreement with Central Bank of the United Arab Emirates, effective for a period of three years. While Central Bank of the United Arab Emirates (CBUA) will provide two (2) Billion United Arab Emirates dirham (AED) as the maximum amount for the Swap currency; RBI will provide credit of INR 35 Billion. The currency swap with UAE is a pact between two countries that allows payments for imports and exports (domestic currencies), without bringing in a third benchmark currency like the US dollar. Both the countries are expected to gain in terms of better and stable trade relations. India and Japan have agreed to enter into a Bilateral Swap Agreement of USD 75 billion. This will be in USD and is expected to act as a backdrop arrangement for the foreign exchange reserves. As per the revised Framework on Currency Swap Agreement for SAARC countries, the table given below gives the amount allocated :-
Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries
Country Afganistan Bangladesh Bhutan Maldives Nepal Pakistan Sri Lanka
Swap Amount Available in US$ million 100 400 100 200 400 400 400
Each member country is required to enter into a separate agreement with us for operationalizing the same. Currently, the agreements with Bhutan, Nepal and Maldives are in force. These countries can draw the amount in either USD or an equivalent amount in Euro. Bhutan is given a facility to draw the equivalent amount in INR also. Pakistan, Bangladesh and Afghanistan have never approached us for operationalizing this arrangement. The Agreement with Sri Lanka lapsed in March 2018. The SAARC swap arrangement is meant as an emergency liquidity support for the member countries in times of temporary difficulties.
(c) : Bilateral trade depends on several macroeconomic factors which inter-alia includes demand side and supply side fundamentals of trading partners. Government of India, through Institutional mechanism such as Joint Commission Meetings (JCMs) and Joint Trade Committees (JTCs) meets its trading partners including UAE and Japan periodically to strengthen bilateral ties in trade, and to address bottlenecks impeding trade, if any. Further, in order to promote Indian exports to its trading partners including UAE and Japan, Department of Commerce under Market Access Initiative (MAI) scheme also provides financial support to Business Federations, Chambers and Export Promotion Councils (EPCs) for organizing trade exhibitions, trade fairs, business meets etc., showcasing Indian products abroad including in UAE and Japan.
(d): Details of India’s trade with UAE and Japan in the last four years are given below:-
Values in US $ Millions
Year/country UAE Japan
Ex/imp/TT Exports Import Total trade Export Import Total Trade
2014-15 33038.08 26139.91 59167.99 5385.57 10131.36 15516.93
2015-16 30316.50 19445.68 49762.18 4662.85 9850.22 14513.07
2016-17 31175.50 21509.83 52685.33 3845.73 9754.64 13600.37
2017-18 28146.12 21739.11 49885.23 4734.22 10973.35 15707.57
Source: DG&CIS
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