The commerce ministry on Friday allowed invoicing, payment and settlement of exports and imports in Indian rupee, a move aimed at facilitating trade in the domestic currency.
In July, the Reserve Bank of India (RBI) had asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of increasing interest of the global trading community in the domestic currency.
To align the Foreign Trade Policy (FTP) with this decision of the RBI, the Directorate General of Foreign Trade (DGFT) added a new paragraph in the FTP.
DGFT is an arm of the ministry which deals with export and import related matters.
“Para 2.52 (d) is notified to permit invoicing, payment and settlement of exports and imports in INR (Indian rupee) in sync with RBI’s …Circular dated July 11, 2022. This shall come into force with immediate effect,” DGFT said in a notification.
Accordingly, it said, settlement of trade transactions in INR may also take place through special rupee vostro accounts opened by authorised dealer banks in India.
As per the new para, Indian importers undertaking imports through this mechanism will make payment in INR which will be credited into the special vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller/supplier.
“Indian exporters undertaking exports of goods and services through this mechanism shall be paid the export proceeds in INR from the balances in the designated special vostro account of the correspondent bank of the partner country,” it added.
Earlier this month, the Reserve Bank and the finance ministry had asked top management of banks and representative of trade bodies to push exports and import transactions in rupee.