Nigeria and India are set to finalize a system for settling International Trade in local currency, following the second annual Joint Trade Committee (JTI) meeting. The meeting, which aimed to enhance bilateral Trade and investment, identified key areas of focus, including resolving market access issues, cooperation in sectors like crude oil and natural gas, pharmaceuticals, and local currency settlement. Both sides agreed to expedite the conclusion of the Local Currency Settlement System Agreement to strengthen economic ties.
India is one of Nigeria’s largest trade partners, with trade numbers between the two countries reaching ₦5.88 trillion in 2023, making India Nigeria’s third-largest trade partner. The move to establish a local currency settlement system aligns with the growing trend of decoupling international trade from USD hegemony, led by the BRICS+ group of nations, which India is a part of. Nigeria has expressed interest in joining the economic bloc within the next two years. The JTI meeting brought together officials from the Reserve Bank of India, EXIM Bank of India, and the National Payment Corporation of India (NPCI), highlighting the commitment of both nations to strengthening economic cooperation.
System to boost trade and investment between both countries.
The establishment of a local currency settlement system is expected to further boost trading relations and Investment between Nigeria and India. The local currency settlement system will enable trade between Nigeria and India to be conducted in Naira and rupees, rather than in US dollars. This move is expected to reduce the dependence on the US Dollar and promote economic sovereignty. It will also make transactions between the two countries more efficient and cost-effective, as it will eliminate the need for currency conversion.
Also, the agreement is also expected to boost economic cooperation between Nigeria and India in key sectors such as crude oil and natural gas, pharmaceuticals, power sector and renewable energy. Nigeria is one of the largest producers of crude oil in Africa, while India is one of the largest consumers of crude oil in the world. The agreement will enable Nigeria to Export crude oil to India in naira, rather than in US dollars, which will reduce the dependence on the US dollar and promote economic sovereignty.
Sectors that will benefit from this agreement.
In addition, the agreement will enable India to invest in Nigeria’s power sector and renewable energy, which is a critical area of focus for the Nigerian government. Nigeria has set a target of generating 30% of its Electricity from Renewable Energy sources by 2030, and India has expertise in this area. The agreement will enable India to invest in Nigeria’s renewable energy sector, which will help to promote Economic Development and reduce dependence on fossil fuels.
It is also expected to boost trade between Nigeria and India in the areas of Agriculture and food processing. Nigeria is one of the largest producers of agricultural products in Africa, while India is one of the largest consumers of agricultural products in the world. The agreement will enable Nigeria to export agricultural products to India in naira, rather than in US dollars, which will reduce the dependence on the US dollar and promote economic sovereignty.
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Furthermore, the agreement will enable India to invest in Nigeria’s agriculture and food processing sector, which will help to promote economic development and reduce dependence on imported food products. Nigeria has set a target of becoming self-sufficient in food production by 2025, and India has expertise in this area. The agreement will enable India to invest in Nigeria’s agriculture and food processing sector, which will help to promote economic development and reduce dependence on imported food products.