India eases rules for rupee export payments, seeks to widen trade settlement
India relaxed rupee export payment rules to promote global trade using local currency, aligning with 2023 foreign-exchange policies.Summary
India has amended its Foreign Trade Policy to allow export contracts and payments with non-Asian Clearing Union (ACU) countries to be settled in rupees or foreign currencies, removing a barrier to rupee trade. The change, effective immediately, enables eligible rupee export receipts (excluding Nepal and Bhutan) to qualify for trade-policy benefits when routed through approved banking channels. This aligns with the Reserve Bank of India's 2023 foreign-exchange rules and aims to address dollar shortages in partner countries. However, experts like Ajay Srivastava note that regulatory changes alone won't drive widespread rupee adoption, citing challenges such as foreign buyers' difficulty obtaining rupees and banks' reluctance to hold non-fully convertible currencies. Success will depend on country-specific settlement deals, simplified banking procedures, and affordable hedging mechanisms.
(Source：Google News)