FINANCE
Cross-border trade settlements reshape sea freight payments
Local currency systems and fintech platforms streamline shipping invoices across the floating economy.
Global shipping is tied to the cost and speed of money. Traditionally invoiced in U.S. dollars, sea-trade payments are now shifting toward local currency systems and digital platforms. The aim: reduce transaction costs, cut FX risk, and simplify settlement for maritime cargo.
India–UAE push rupee–dirham settlement. In August 2024, India’s central bank urged banks to settle part of their UAE trade in rupees and dirhams. Since most of this bilateral trade flows through ports on oil tankers and container ships, the shift directly impacts sea-trade billing.
Local Currency Settlement under CEPA. In 2025, India and the UAE expanded talks on their Local Currency Settlement System for bilateral trade. The framework, covering sectors like pharma and non-oil goods, applies to shipments largely transported by sea.
Rupee–dirham trade promoted regionally. Analysts in 2024 noted that India’s encouragement of INR-AED invoicing reduces dependence on the dollar. Given the UAE’s role as a maritime hub, these changes cascade through shipping corridors in the Gulf and Indian Ocean.
Challenges in scaling LCS. By 2025, commentators highlighted the need for deeper forex markets and balanced flows to scale India-UAE local currency trade. This includes practical adjustments for shipping lines and port authorities handling invoicing in new currencies.
Fintech tools enter container payments. In March 2025, Hapag-Lloyd and PayCargo launched a Container Payment Portal to digitize payments for box shipments. While still dollar-denominated, the platform shows how fintech is entering the shipping settlement chain.
That’s not all: central bank pilots with local currencies are converging with shipping fintech platforms. Analysts expect these systems to merge, giving maritime operators direct, faster, and cheaper settlement tools as the floating economy grows.
—TFI
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