India has kicked off local currency trade with the Gulf state of UAE with the country's largest crude refiner purchasing a million barrels in rupees, a statement from the Indian High Commission in UAE said.
The Indian Oil Corporation Limited (IOCL)'s payment to UAE's state-run Abu Dhabi National Oil Company (ADNOC) was made in both rupees and dirhams, the Indian embassy added.
"The first-ever crude oil transaction under the newly implemented Local Currency Settlement (LCS) took place on Monday between the ADNOC and IOCL. The transaction involved the sale of 1 million barrels of crude oil. Both Indian Rupee and UAE Dirhams were used in the transaction," the statement read.
The development comes on the heels of Indian Prime Minister Narendra Modi's visit to Abu Dhabi last month where the two countries announced the deal.
The UAE is India's third largest trade partner in the world, surpassed only by the United States and China. During the last fiscal, trade between the two nations touched $85 billion, and is expected to cross the $100 billion mark in 2023-24.
The latest move is part of New Delhi's attempts at bringing down the costs of transactions by removing dollar conversions, especially in bilateral trade.