India allows cross-border trade settlements in rupees for export promotion schemes

The Indian government on Wednesday said it has allowed international trade settlements in the local currency for export promotion schemes under foreign trade policy, further easing such cross-border transactions in rupees.

"The government of India has made suitable amendments in the Foreign Trade Policy and Handbook of Procedures to allow for international trade settlement in Indian rupees," the government said in a statement.

Earlier this year, New Delhi had allowed international trade invoicing, payment and settlement in the Indian rupee, activating the mechanism announced by the Reserve Bank of India (RBI) to facilitate trade in the domestic currency.

The central bank allowed authorised banks in India to open special rupee Vostro accounts of correspondent banks of any partner trading country to facilitate trade in the Indian currency.

The move was aimed to boost global trade with focus on shipments from India and to support the interests of the global trading community in Indian currency.

"Given the rise in interest in internationalisation of Indian Rupee, the given Policy amendments have been undertaken to facilitate and to bring ease in international trade transactions in Indian Rupees," the government said.

Source: The Economic Times