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The seller will receive those dollars which will then be converted into Euros. If an Indian buyer enters into a transaction with a seller from Germany, the Indian buyer has to first convert his rupees into US dollars. Since the US Dollar is the world’s reserve currency, most of these transactions are entered into US dollars. When countries import and export goods and services, they have to make payments in a foreign currency. Why International trade Settlement in Rupees? It is also stated that the Rupee surplus balance accumulated in such account may be used for permissible capital and current account transactions in accordance with mutual agreement.As mentioned above, the Circular further states that the exchange rate between currencies of two trading partner countries may be market determined and the entire process will be carried out using a special VOSTRO account.RBI has also placed an additional arrangement for invoicing, payment, and settlements of exports/imports in Indian rupees.The important announcement made via the RBI Circular dated International Trade Settlement on 11th July 2022 is listed as follows: The present article briefs the International Trade Settlement in Indian Rupees.įor more details on Foreign Trade Policy, click here The Gist of RBI Circular

To accept payments in rupees, authorized dealer banks will have to open special Rupee Vostro accounts. The decision to allow INR in international trade settlements is considered an important step to facilitate trade with Russia, Iran, and Sri Lanka.

This measure is aimed at facilitating the growth of global trade with emphasis on export from India and to support the interests of the global trading community in Indian rupees. On July 11th, 2022, the Reserve Bank of India announced a big decision by allowing trade settlements between India and other countries in Indian Rupees (INR). Learn » Import - Export » RBI allows International Trade Settlement in Indian Rupees RBI allows International Trade Settlement in Indian Rupees