![]() This is also true for the companies operating in several other sectors as well. He says that substantial payments made by the companies operating in the aviation sector are done in dollars while their earnings are in rupees. “If we can get delinked ourselves from dollar trading, that will help us a lot,” says Ajay Singh, chairman and managing director of SpiceJet. ![]() It will impact the Indian economy and the business in multiple ways.Īlso Read | India, Malaysia can now trade in Indian rupee This paves the way for internationalisation of rupee. Clearly, the arrangement, which started with sanctions-hit Russia and dollar-strapped Sri Lanka, is gaining momentum globally. The increasing participation of the countries will strengthen the hold of the rupee as a currency in the international foreign exchange market. The RBI has so far allowed this special account arrangement with 18 countries – Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, and the United Kingdom. The international trade payment settlement in rupee is done through Special Rupee Vostro Accounts. India and Malaysia earlier this month agreed to allow trade settlement in rupee. The first settlement under this mechanism was done with Russia in December 2022. Nearly five months after Russia’s invasion of Ukraine, the Reserve Bank of India (RBI) came out with a mechanism to facilitate international settlement of trade in rupee. The trigger for pushing rupee as a currency for settlement of foreign trade came from the Russia-Ukraine war. It clears the way for all export contracts and invoices to be denominated in Indian Rupee (INR).Ĭommerce Secretary Sunil Barthwal says that settlement of foreign trade payments in rupee would be particularly helpful in boosting shipments to several countries facing shortage of dollars, like Sri Lanka and Bangladesh.Īlso Read | Rupee goes global: Road ahead is fraught with risks One of the key highlights of India’s foreign trade policy, which came into effect on April 1, is its focus on facilitating use of rupee for settlements in international trade. ![]()
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