Ex-Im - #SectorUpdates
The Reserve Bank of India (RBI) has recently asked banks to put in place additional arrangements for export and import transactions in the Indian Rupee (INR) given the increasing interest of the global trading community in the domestic currency. This arrangement was put in place for invoicing, payment, and settlement of exports/ imports in INR in the backdrop of a weakening of INR due to FPI equity outflows and a strong USD. As India imports more than it exports the country will save foreign currency under the new arrangement. In FY 22 India’s merchandise goods export was around USD 422 billion against the import of USD 613 billion resulting in a trade deficit of around USD 190 billion. This step can particularly help in the growth of trade between Brazil, Russia, India, China, and South Africa (BRICS) and South Asian nations where rupee-rupee transactions were a long-standing demand.