Synopsis
India and Nigeria have agreed to conclude a local currency settlement system agreement to strengthen economic ties. The agreement, signed during a joint session of the India-Nigeria Joint Trade Committee, aims to promote the use of the Indian Rupee and Nigerian Naira for cross-border transactions. The agreement will enhance bilateral trade and mutually beneficial investments in sectors such as crude oil, natural gas, pharmaceuticals, power, renewable energy, agriculture, education, transport, railway, aviation, and MSMEs development._
India and Nigeria have agreed to an early conclusion of a local currency settlement system agreement to further strengthen economic ties between the two countries. According to the department of commerce, a seven-member delegation from India, led by Additional Secretary in the commerce ministry, Amardeep Singh Bhatia, visited Abuja, Nigeria, for the second session of India-Nigeria Joint Trade Committee (JTC) on April 29-30. It was held after a gap of five years.
Further, a senior Indian commerce ministry official delegation also visited Australia and New Zealand.
Both India and Nigeria have identified several focus areas to enhance bilateral trade and mutually beneficial investments.
The sectors include crude oil, natural gas, pharmaceuticals, unified payments interface (UPI), local currency settlement system, power and renewable energy, agriculture and food processing, education, transport, railway, aviation, and MSMEs development.
“Both sides agreed to the early conclusion of a local currency settlement system agreement to further strengthen bilateral economic ties,” the department has said on social media platform X (formerly Twitter).
The New Diplomat reports that India is a member of the nine-member nations of the BRICS alliance, comprising the five initial members of Brazil, Russia, India, China and South Africa (BRICS) and four new members, Iran, Egypt, Ethiopia and United Arab Emirates.
Though Nigeria is not a member of the BRICS, it’s attended the grouping’s annual summit as an observer, and has expressed interest in joining the organisation within two years from 2023.
The BRICS is an intergovernmental organisation that establishes deeper ties between and among member countries and cooperates on economic expansions, such as trade.
Set to counterbalance Western alliances, the BRICS alliance will meet in October 2024, for its annual summit, where it is being reported that the developing countries may announce setting up a new currency that may challenge dollar’s dominance in international trade.
According to a Watcher Guru report, India and Nigeria, in a bid to counter the United States dollar’s supremacy, have agreed to trade in their local currencies and not the greenback anymore.
Is fall of the dollar nearing, as the BRICS member-nations have prior stated their intention to ditch the dollar?
Meanwhile, The Economic Times notes that a local currency settlement system between India and Nigeria would help in promoting the use of Indian Rupee and Nigerian Naira for cross-border transactions.
There are several Indian companies present in Nigeria in telecom, hydrocarbons, textiles, chemicals, electrical equipment, pharmaceuticals, plastics, IT and auto sectors.
Indian automobile companies have a significant presence in Nigeria.
India’s main exports to Nigeria include machinery and instruments, drugs, pharma and fine chemicals, transport equipment, electronic goods, and manufacture of metals. Imports mainly include petroleum, crude and products, non-ferrous metals, wood and wood products, and cashew nuts.
The bilateral trade stood at USD 11.85 billion (exports USD 5.2 billion and imports USD 6.7 billion) in 2022-23. The trade was about USD 15 billion in 2021-22.
(Culled from Economic Times, withadditionalreporting)
