India to trade in rupee with countries with currency failure

Chennai: As the Foreign Trade Policy sought internationalisation of rupee, Commerce Secretary Sunil Barthwal said India is ready to trade in Indian rupee with countries facing currency failure or having dollar shortage.

The decision to elevate the rupee’s status as an international trade settlement currency comes at the right time when several economies are rattled by currency fluctuations and dollar shortage. India’s move also has to be seen in the backdrop of several emerging economies diversifying their reserves in the past few years in order to go light on the greenback.

Speaking after unveiling the Foreign Trade Policy 2023, the secretary said the government is focusing on strengthening the rupee payment system.

Changes have been made in the policy to allow international trade settlement in rupee with a view to making the local currency a global currency. The country is willing to trade in rupee with peers facing dollar shortage, taking exports forward and disaster-proofing those countries.

“There's a need to address geopolitical effects in a dynamic manner,” he said. “We are playing the same role as multilateral agencies,” he added.

India has been successful in forging agreements with 18 countries since embarking on the agenda of settling trade in the rupee amid currency volatility last year. Foreign Trade Policy benefits will also be extended for rupee realisations through special Vostro accounts setup as per RBI circular issued on July 11, 2022.

India also plans to push the rupee trade agenda in the G-20 meetings it is organising as part of its ongoing presidency of the forum.