International Trade Settlement in Indian Rupees
NO:CLE-HO/POL/CIRCULARS/2023
November 24, 2023
Members of the Council
Sub : International Trade Settlement in Indian Rupees
Dear Member
Kindly refer to our earlier circular dated Dec. 16, 2022 on the above subject.
As members are aware, the Reserve Bank of India (RBI) has allowed invoicing and payments for international trade in Indian Rupee vide A.P (DIR Series) Circular No. 10 RBI/2022-2023/90 dated 11.07.2022 on “International Trade Settlement in Indian Rupees (INR)”. This is an additional arrangement to the existing system of settlement.
The aforesaid RBI Circular lays down that all exports and imports under the arrangement may be denominated and invoiced in Rupee (INR) and the settlement of trade transactions under the arrangement shall take place in INR. RBI has put in place the arrangement to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR. The framework put in place by RBI is applicable for any partner country seeking to undertake trade with India in INR in terms of RBI’s Circular dated 11.07.2022
The Directorate General of Foreign Trade (DGFT) had earlier introduced a provision in the Foreign Trade Policy vide Notification No. 33/2015-20 dated 16.09.2022, to allow for International Trade Settlement in INR i.e., invoicing, payment, and settlement of exports / imports in Indian Rupees in sync with RBI’s Circular dated 11.07.2022. Further changes were introduced in the Foreign Trade Policy vide DGFT’s Notification 43/2015-20 dated 09.11.2022 and Public Notice 35/2015-20 dated 09.11.2022 for grant of exports benefits and fulfilment of Export Obligation for export realisations in INR as per RBI guidelines, the Minister stated.
The Reserve Bank of India (RBI) has now issued a circular dated Nov. 17, 2023 (copy enclosed) stating that banks maintaining special rupee vostro accounts are permitted to open an additional special current account for its exporter constituent exclusively for settlement of their export transactions. Members may hence approach their banks for further details, if they wish to open a fresh account for International Trade Settlement in Indian Rupees
Thanks & regards,
R.Selvam
Executive Director
DGFT Notification 33 dt 16-09-22
Rupee Trade Mechanism – RBI circular 11.7.22