Govt has started trade with neighbouring countries in INR, says Anupriya Patel

?The government has initiated a novel approach to enhance trade relations with neighbouring nations, Nepal and Bhutan, as revealed during a parliamentary session. In response to an inquiry in the Lok Sabha, Anupriya Patel, the Minister of State for Commerce and Industry, underscored the noteworthy adoption of the Indian Rupee (INR) as a predominant currency in India-Nepal trade and exclusively in all bilateral exchanges with Bhutan.

The introduction of the Rupee trade mechanism serves the purpose of promoting trade activities using the national currency with Russia. The minister conveyed that as of July 2, the Reserve Bank of India (RBI) has granted its endorsement to 34 applications from diverse Russian financial institutions, permitting them to establish Special Rupee Vostro Accounts (SRVA) within 14 prominent Indian commercial banks, in accordance with guidelines issued by the RBI.

Signifying further advancements, the minister conveyed that Sri Lanka has included the Indian Rupee (INR) within its roster of officially recognized foreign currencies. This development has led to the authorization for Indian Authorized Dealer (AD) banks to establish rupee vostro accounts. This expansion is evidenced by the establishment of such accounts by eight corresponding banks from Sri Lanka in collaboration with respective AD banks in India, following the pre-approval of the RBI.

The minister went on to describe the accord between India and Iran that facilitates the bilateral trade payment process between the two countries, which was formally implemented on November 5, 2018.

Continuing the discourse, the minister highlighted the inauguration of a newly devised mechanism for the settlement of trade transactions in Indian Rupee (INR) between India and Bangladesh, formally activated on July 11. This innovative approach designates two Indian banks, namely the State Bank of India (SBI) and ICICI Bank, along with two Bangladeshi banks, Sonali Bank PLC and Eastern Bank Ltd, to facilitate the bilateral trade in INR.

A pivotal event in the launch of INR-centric trade was the formal exchange of Letters of Credit (LC) documents between the primary exporter and importer, orchestrated through their respective banks on July 11, 2023, thereby officially heralding the commencement of trade operations using the Indian Rupee (INR).

Source: EconmoicTimes