Chennai: In order to enhance trade and investment, India has to unify payment systems with the European Free Trade Association and establish a local currency settlement system for cutting reliance on the US dollar.The unification of payment systems between India and the EFTA countries – Iceland, Liechtenstein, Norway, and Switzerland – similar to the India-Singapore agreement that linked India’s Unified Payments Interface (UPI) with Singapore’s PayNow, could offer significant benefits.This integration enhances cross-border transactions by making them faster and more cost-effective. A similar system with the EFTA countries would streamline financial transactions, reducing costs and complexity for both businesses and consumers. It would facilitate seamless remittances and payments, fostering stronger economic ties and promoting investment in fintech innovations. Additionally, promoting collaboration between fintech companies from India and EFTA could drive innovation and position both regions as leaders in global financial technology.Further, a local currency settlement system between India and the EFTA countries would significantly enhance trade and investment by facilitating transactions in the respective local currencies, thereby reducing reliance on major currencies like the US dollar. Such a system allows businesses in India and the EFTA countries to settle trade invoices and financial transactions in their domestic currencies, streamlining cross-border trade and mitigating exchange rate risks. For Indian businesses, this system would simplify payments and receipts with EFTA partners, potentially lowering transaction costs and exposure to currency fluctuations.It would also promote bilateral trade by making transactions more straightforward and reducing the need for currency conversion. The EFTA countries would benefit similarly, gaining a more stable and predictable environment for trade with India. Additionally, implementing a local currency settlement system could enhance economic stability and strengthen financial ties between India and EFTA.
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