India is currently in discussions with around 22 countries for executing bilateral trade in Rupee, Finance Minister Nirmala Sitharaman said in a television interview on Friday.
“About 22 countries are negotiating and approaching us to see if bilateral trade can be held (in rupees). It is also because many of… those countries are running short of dollar,” Sitharaman told news channel NDTV during an interview.
India of late has taken a few measures to encourage the utilisation of the Indian rupee for executing international transactions. The South Asian country has established special rupee vostro accounts within domestic banks, thus facilitating the exchange of national currencies, through collaborations with banks from 22 different countries.
The Reserve Bank of India (RBI) has granted permission for banks from 18 countries to open Special Vostro Rupee Accounts (SVRAs) for the purpose of settling payments in Rupee, the Central government told the Rajya Sabha.
In response to an inquiry from BJP’s Sushil Kumar Modi, Bhagwat Karad, the Union Minister of State for Finance, explained that banks from partner countries can establish SVRAs by engaging with Authorised Dealer (AD) banks in India, subject to obtaining permission from the RBI.
Following the BRICS summit in Johannesburg, Foreign Secretary Vinay Kwatra expressed that discussions regarding trade settlements in national currencies have been notably positive within the BRICS framework.
During a special briefing by the Ministry of Foreign Affairs on the Prime Minister’s visit to South Africa, Kwatra said that BRICS nations have been discussing for quite some time how to put in place a mechanism through which each of BRICS countries can at least start doing trade settlements in the national currencies.
“Conceptually, he added, “Trade settlement in national currency, we have already started working on it, not just as a discussion or a talking point but also on the ground cooperation.”
“We are also pursuing trade settlements in national currency with several other countries. So, if it becomes a point of highly advanced discussions in the BRICS and the BRICS countries agree to do trade settlement in national currency, something which is of a great promise within BRICS,” Kwatra added.
(With agency inputs)
