India and the United Arab Emirates also cooperate on a large scale in the energy sector. Earlier this year, abu Dhabi National Oil Company (Adnoc) and an Indian consortium led by the Oil and Natural Gas Corporation (ONGC) signed a 10 per cent offshore concession contract, which gives Indian companies the opportunity to develop lucrative offshore oil fields in Abu Dhabi, which produce about 1.4 million barrels of oil per day. It is likely that a currency exchange agreement will offset short-term liquidity asymmetries between the two currencies and support economic stability. Bilateral trade between the two countries amounted to about $52 billion in 2017. The currency exchange contract is such a pact between two countries, which allows trade in their own currency and payments for import and export transactions at a predetermined exchange rate, without introducing a third reference currency, such as the U.S. dollar. Thanks to the Sweasion Agreement, India and the United Arab Emirates can make payments in their respective currencies to stimulate and exchange investments without using a third currency such as the dollar. Clarification of the Indian embassy currency swap agreement in Abu Dhabi said the swap for an amount of Dh2 billion or 35 billion Indian rupees, according to the central bank that asked for the amount. Yi Gang, governor of the People`s Bank of China, and Godwin Emefiele, Yis`s Nigerian counterpart, signed a three-year monetary swaquage contract of 15 billion yuan, or 720 billion nairas, in Beijing on April 27.
“It is also expected that there will be a boost for local currencies in both countries and that it can reduce the impact of exchange rate volatility resulting from dependence on a third currency. It is also expected to reduce transmission costs arising from foreign exchange risk. Signing the currency exchange agreement between India and the United Arab Emirates will help promote trade and investment between the two countries, a Ministry of Trade and Industry official said on Wednesday. With this agreement, the two countries allow trade in their own currency and payments for import and export transactions at a predetermined exchange rate, without introducing a third reference currency such as the U.S. dollar, the official added. The swap agreement will also reduce transmission costs related to foreign exchange risks, he added. The agreement on Indian rupee/UAE dirham currency swap between the Central Bank of the UAE and the Reserve Bank of India was exchanged in the presence of the two foreign ministers by Mohammad Ali Bin Zayed Al Falasi, deputy governor of the Central Bank of the UAE and Navde Siep Singh Suri, ambassador of India to the UAE, the state addmented. The pact is also important for the fact that India is the largest trading partner of the United Arab Emirates and the third largest trading partner of the United Arab Emirates, India, after the United States and China. Looking at the figures for 2014-2015, trade between the two countries reached Dh 216 billion and consists mainly of oil and petroleum products.