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The government of India has notified the change in the Foreign Trade Policy 2015-2022 comes after the Reserve Bank of India had, on 11th July 2022. Handbook of Procedures to allow for international trade settlement in Indian rupees, a statement said The Government on Wednesday allowed international trade settlements in the Indian rupee for export promotion schemes under foreign trade policy.
The scheme would include benefits, incentives, and fulfillment of the export obligations under the Foreign Trade Policy can be extended to export payments made in Indian rupees, as outlined by the Reserve Bank of India (RBI) on 11th July 2022 wherein it had announced the setting up of a mechanism to settle global trade in rupees.
The ministry said in a statement that with the given rise in interest in the internationalization of the Indian Rupee, the passed Policy amendments have been undertaken to facilitate and bring ease in international trade transactions in Indian Rupees.
The ministry said the changes have been notified for imports for exports, export performance for recognition as Status Holders, the realization of export proceeds under advance authorization and Duty-Free Import Authorisation schemes, and realization of export proceeds under the export promotion capital goods scheme.
The Directorate General of Foreign Trade (DGFT), under the commerce ministry, has already allowed invoicing, payment, and settlement of exports and imports in Indian rupee with the exchange rate between the currencies of the two trading partner countries to be market determined.
The notification said changes had been introduced in the Foreign Trade Policy (FTP) for the grant of export benefits, incentives, fulfillment of export obligations, and for export realizations in Indian rupees as per the RBI guidelines released in July.
In July, the Reserve Bank of India (RBI) asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of the increasing interest of the global trading community in the domestic currency.
To settle these transactions, authorized Indian banks have to open Special Rupee Vostro Accounts of correspondent banks of the partner trading country.
