Lok Sabha Question No. 2183 (UNSTARRED), answered on 2018-12-24
Subject: India’s Trade with UAE and Japan
Ministry: COMMERCE AND INDUSTRY
Asked by: V. SATHYABAMA, PR. SENTHILNATHAN, R. VANAROJA

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 2183 TO BE ANSWERED ON 24 th  DECEMBER,2018

## INDIA'S TRADE WITH UAE AND JAPAN

## 2183.   SHRIMATI V. SATHYA BAMA:

SHRI PR. SENTHIL NATHAN: SHRIMATI VANAROJA R.

Will the Minister of COMMERCE & INDUSTRY ( वा ͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (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?

## ANSWER

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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   | Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries   | Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries   | Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries   | Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries   | Amount allocated under revised Framework on Currency Swap Arrangement for SAARC countries   | 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/countr y   | UAE      | UAE      | UAE         | Japan   | Japan    | 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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