All exports and imports under this arrangement may be denominated and invoiced in rupees. The RBI has detailed the broad framework for cross-border trade transactions in rupees under the Foreign Exchange Management Act, 1999 (FEMA): 1.
INTERNATIONAL TRADE SETTLEMENTS IN RUPEE: WHAT DOES IT MEAN? The SBI in its "Research Ecowrap" stated, "The Russia-Ukraine war and the disruptions to payments caused by it, is a good opportunity to insist on export settlement in rupees, beginning with some of the smaller export partners." Last week, the State Bank of India (SBI) proposed that RBI should make a "conscious effort to internationalise the rupee". The RBI's order comes at a time when the rupee has crashed to record low levels against the US dollar in recent weeks. "In order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR," the RBI said in a statement on Monday.
The order takes immediate effect and the mechanism is designed to "promote growth of global trade with emphasis on exports," the RBI said. By Debjit Sinha: The Reserve Bank of India (RBI) has announced that it is putting into place a mechanism for international trade settlements in rupees.
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