SJM lauds settlement for import-export in Indian Rupee
"This was a strategic decision in the background of Ukraine and Russia war and US sanctions on use of dollar for payments to Russia and Iran. Another reason was to support weakening Indian Rupee by promoting Indian export resulting in growth in foreign trade," the SJM said.
The RSS-backed Swadeshi Jagaran Manch has lauded the decision of the Reserve Bank of India to allow settlement for import and export of goods and services in Indian Rupee.
"This was a strategic decision in the background of Ukraine and Russia war and US sanctions on use of dollar for payments to Russia and Iran. Another reason was to support weakening Indian Rupee by promoting Indian export resulting in growth in foreign trade," the SJM said.
This would be a significant step towards reducing India's reliance on the dollar and could have a number of benefits for the Indian economy, National Co-Convenor of SJM Dr Ashwani Mahajan said. In December, 2022, for the first time, India made payment to Russia for import of crude oil in Indian Rupee. This has released some pressure on Indian Rupee to buy dollar at continuously increasing rate from the market, said the statement issued after the National Council Meeting of the Manch in Pune on June 3-4.
As a result of this decision in July 2022, many countries interested in importing from India and were not able to do so, due to paucity of dollars, can pay now in Indian Rupee for their imports. To facilitate settlement of trade in Indian Rupee, so far, Indian banks have opened ‘Special Vostro Accounts' with 19 countries including UK, New Zealand, Germany, Malaysia, Israel, Russia and United Arab Emirates. Like Russia, some other countries out of these 19 countries, export hugely to India and they shall be paid in Indian Rupees for their exports. It is reasonably believed that such countries are likely to use their Indian Rupee reserves for importing more and more products from India.
"It may give a substantial boost to exports from India subject to quality and quantity of goods or services available in India required by them," the SJM said. The entire exercise will help in saving precious foreign exchange reserves amid rising global economic risks. Corresponding changes have been made in the Foreign Trade Policy to allow for International Trade Settlement in INR i.e., invoicing, payment, and settlement of exports/imports in Indian Rupees in sync with RBI’s Circular dated 11.07.2022. Further changes have been introduced in the Foreign Trade Policy for grant of exports benefits and fulfilment of Export Obligation for export realisations in INR as per RBI guidelines.
"These changes will ensure that exporters remain entitled to export incentives even when payments of their exports is realised in Indian Rupee," the SJM pointed out in the statement. "The Rashtriya Parishad of Swadeshi Jagran Manch congratulates the Government for this historic step of approving trade settlement in rupees and urges upon the government to take steps to further this objective," the statement added.
