India’s efforts to encourage settlement of overseas trade in Indian rupees are paying off; the first users of the channel were nearby nations like Bangladesh and Sri Lanka.
Anupriya Patel, a minister of state for commerce and industry, responded to a question in the Lok Sabha by stating that Sri Lanka has added the Indian rupee to its list of authorized foreign currencies and that a new mechanism was introduced last month with Bangladesh to settle trade in Indian rupees.
India’s sixth-largest export market is Bangladesh. India shipped goods worth $11.6 billion to Bangladesh in FY 23, a 27% decrease from FY 22. In 2022–2023, India imported $2.02 billion from Bangladesh, an increase of 2.1 over the previous year.
The cotton yarn has the largest export to Bangladesh with a share of 8.7%, followed by petroleum products with a share of 7%. India exports $5 billion to Sri Lanka while importing $1 billion. According to the minister, a sizable portion of commerce with Nepal is conducted in Indian currency, whereas all trade with Bhutan is conducted in rupees.
To promote currency exchange with Russia, a rupee trade mechanism has been launched. The Special Rupee Vostro Accounts (SRVA) opening instructions were published by the RBI for foreign banks to use in Indian commercial banks. 34 applications from various Russian banks for the opening of SRVA in 14 Indian commercial banks had, as of July 2, 2023, received RBI approval, according to Patel.
