India and Nigeria have agreed for early conclusion of Local Currency Settlement System Agreement to enable trade in domestic currencies and settle other capital and current account transactions, a statement said on Friday.
Along with local currency settlement of transactions, both sides also discussed cooperation in United Payments Interface (UPI) at the Joint Trade Committee (JTC) which was held in Ajuba.
Apart from commerce ministry officials, the official delegation from India to Nigeria consisted of officials from Reserve Bank of India (RBI), EXIM Bank of India and National Payments Corporation of India (NPCI).
As of March 2024, India has started trading in its own currency with neighbouring countries Nepal and Bhutan. Sri Lanka has also designated the Indian rupee as a foreign currency, which allows for bilateral trade between the two countries.
Other countries, such as Bangladesh, are also interested in trading with India in rupees. India and UAE have also started Rupee-Dirham trade.
In March RBI and the Bank Indonesia (BI) signed a Memorandum of Understanding (MoU) on Friday in Mumbai for establishing a framework to promote the use of local currencies.
Banks from more than 22 countries have opened Special Rupee Vostro Accounts in Indian Banks. These countries include Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar and the United Kingdom.
At the JTC both sides undertook a detailed review of recent developments in bilateral trade and investment ties and agreed to cooperate on resolving market access issues. Other areas of cooperation that were discussed included crude oil and natural gas, pharmaceuticals, power sector and renewable energy. Issues around agriculture and food processing, education and transport also came up for discussion.
Nigeria is the 2nd largest trading partner of India in the Africa region. Bilateral trade between India and Nigeria stood at $ 7.8 billion in 2023-24, down from $11.8 billion in the previous year. With a total investment of $ 27 Billion, approximately 135 Indian companies are actively engaged in Nigeria’s market.
Nigeria is a member of the Organisation of Petroleum Exporting Countries (OPEC). India imported $ 2 billion worth of crude from Nigeria in April-January last FY, which was much lower than $ 5.4 billion in the previous year. India’s biggest export to Nigeria is petroleum products. India also imports LNG from Nigeria..
