India Amends Rules to Facilitate International Trade Settlement, Payment in Indian Rupees
11:15 GMT 17.09.2022 (Updated: 16:29 GMT 08.12.2022)
© AP Photo / Channi AnandFILE- In this Nov. 13, 2016 file photo, an Indian holds 2000 rupee currency notes in Jammu, India
© AP Photo / Channi Anand
India has introduced invoicing and payments for international trade in the Indian rupee (INR) to reduce dependence on hard currencies such as the US dollar, British pound, and the euro. The Commerce Ministry hopes the rupee-ruble payment arrangement will resume by the end of September.
India's Ministry of Commerce on Saturday introduced international trade settlement, payment, and invoicing in Indian rupees by amending the foreign trade policy, a measure aimed at reducing dependence on hard currency such as the US dollar.
With the amendment in foreign trade policy, the settlement of trade transactions in the Indian rupee may also take place through Special Rupee Vostro accounts operated by foreign banks in India.
In July, the Reserve Bank of India (RBI) asked commercial banks to make necessary arrangements to facilitate exports and imports in Indian rupees, given the increasing interest of the global trading community in the country's domestic currency.
The amendment will significantly boost Indian businesses waiting for a new arrangement to trade with US sanctions-hit countries like Russia, Iran, and some Latin American nations with whom Delhi has substantial trade.
14 September 2022, 12:31 GMT
According to the Commerce Ministry's notification, importers will now have to deposit the due amount to a Special Vostro Account of the bank of the particular country in India.
Indian Finance Minister Nirmala Sitharaman said in parliament on August 8 that allowing invoicing and payments for international trade in the Indian rupee could help the country reduce the ballooning trade deficit.
India's trade deficit rose to $124.52 billion in April-August this financial year, compared to $53.78 billion in the same period in 2021, due to a record jump in commodities prices.