Home
|
Sitemap
|
FAQs
|
Contact Us
Product
Country
Menu
About Agri Exchange
Introduction
Apeda Agri Exchange
The Vision
Benefits / Facilities
To Exporters
To Buyers
Product Profile
Floriculture
Floriculture
Fruits & Vegetables Seeds
Fresh fruits & Vegetables
Fresh Onion
Other Fresh Vegetables
Walnuts
Fresh Mangoes
Fresh Grapes
Other Fresh Fruits
Others (Betel Leaves & Nuts)
Processed Fruits & Vegetables
Cucumber and Gherkins (Prepd. & Presvd.)
Processed Vegetables
Mango Pulp
Processed Fruits,Juices & Nuts
Pulses
Animal Products
Buffalo Meat
Sheep/ Goat Meat
Other Meat
Processed Meat
Animal Casing
Poultry Products
Dairy Products
Natural Honey
Caseins
Albumin (Eggs & Milk)
Other Processed Foods
Groundnuts
Guar Gum
Jaggery & confectionery
Cocoa Products
Cereal Preparation
Milled Products
Alcoholic Beverages
Miscellaneous Preperations
Cereals
Basmati Rice
Non Basmati Rice
Wheat
Maize
Other Cereals
Country Profile
United Arab Emirates
Saudi Arabia
Malaysia
Bangladesh
United States
Vietnam
Kuwait
Iran
United Kingdom
Indonesia
...View more country profiles
FTA's
Analytical Report on FTAs
Tariff Concession under FTAs
Statistics
International Trade
India's Export
India's Import
Production
International Production
India Production
Market Intelligence
e-Bulletin
Global Analytical Report
India's Export Analytical Report
Comparative Report On APEDA Products
Comparative Report On Principal Commodities
Import Tariffs
Import Regulations
SPS Notifications
DGFT : Public Notice, Notifications, Circular and Trade Notice
India Food Safety & Standards
Market Reports
Foreign Trade Policy 2023
Chapter 01 - Legal Framework and Trade Facilitation
Chapter 02 - General Provisions Regarding Imports and Exports
Chapter 03 - Developing Districts as Export Hubs
Chapter 04 - Duty Exemption Remission Schemes
Chapter 05 - Export Promotion Capital Goods (EPCG) Scheme
Chapter 06 - Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs)
Chapter 07 - Deemed Exports
Chapter 08 - Quality Complaints and Trade Disputes
Chapter 09 - Promoting Cross Border Trade in Digital Economy
Chapter 10 - Scomet: Special Chemicals, Organisms, Materials, Equipment and Technologies
Chapter 11 - Definitions
Newsletters
Latest News
Latest Newsletter
Archives
Directory
Exporters
Service Providers
Logistics
Trade Leads
Submit New lead
Buy Leads
Sell Leads
Indian Mission Login
Market News
India's move on rupee settlements may help trade with Russia.
Jul 14, 2022
India's central bank this week introduced a new mechanism for international trade settlements in rupees, aiming to promote exports and facilitate imports.
Besides promoting international use of the local currency, many exporters and economists see the measure as a way to promote trade with countries that are under Western sanctions, such as Russia and Iran.
Moscow has been discussing with India, Iran, Egypt and some other countries ways to remove dollars and euros from commercial transactions.
Following are key facts about India's plans for settlement of international trade in rupees.
HOW WILL THE SYSTEM WORK?
To settle international trade transactions in rupees, a foreign bank will need to open a vostro account - an account that a correspondent bank holds on behalf of another bank - with an authorised Indian bank.
Indian banks would need prior approval from the Reserve Bank of India to act as correspondent banks.
Indian importers of goods or commodities such as oil or coal would make payments to these accounts in rupees. The accounts could then be used to pay Indian exporters in the local currency.
Surplus from vostro accounts could be used to invest in government bonds, and payment for projects and investments, the RBI said.
WHICH COUNTRIES ARE LIKELY TO USE THE NEW MODEL?
Exporters' bodies said RBI's move would help support trade with countries under sanctions, mainly Russia and Iran, and with African and South American countries - and neighbouring Sri Lanka - that have little access to hard currencies.
The RBI has not however explicitly named countries for which new mechanism could be used.
Exporters have been lobbying to Indian government to set up such a mechanism, along the lines of an earlier system introduced in 2012 to trade with Iran after the United States and other western countries imposed financial sanctions.
EXCHANGE RATE
The exchange rate between the Indian currency and those of trading partners will be market-determined, and settlement will take place in rupees.
Banks will be allowed to provide letter of credits, bank guarantees, and offer advance payments to exporters for trade transactions.
CURRENT SYSTEM OF PAYMENT
Currently, international transactions are mostly settled in foreign currencies, such as U.S. dollars, British pounds, euros or yen. Payments in rupees are allowed only for some neighbouring countries, like Nepal and Bhutan.
Indian companies usually pay for imports in foreign currencies, while exporters get paid in foreign currency and convert into rupees in most cases.
IMPACT ON TRADE WITH SANCTIONED COUNTRIES
Traders have welcomed the new mechanism, which they hope will increase engineering, pharmaceutical and foodgrain exports to Russia and some other countries by at least few billion dollars this year, while making crude oil imports cheaper.
Some commodity traders said they were in touch with buyers in Russia, and expect to use the mechanism in coming days.
India's exports to Iran almost doubled after the setting up in 2012 of a mechanism to partly settle trade in rupees, while it got oil supplies at a discounted price.
WHAT ARE THE BENEFITS FOR INDIA?
The RBI's move could marginally narrow India's widening trade deficit by reducing the price of commodity imports, analysts said, noting that imports of crude oil from Russia have surged in recent months.
But government officials said India would move cautiously on internationalising the local currency given associated risks for the economy, such as high exposure to global shocks, asset bubbles and exchange rate volatility.
m.economictimes.com
Archive