A number of countries with hard currency shortage, including neighbours such as Sri Lanka and Maldives, have shown interest in switching to rupee trade with India, sources have said.
Countries such as the UAE and Saudi Arabia are also keen to start talks with India on the matter while many in Africa and Latin America too have expressed their eagerness to explore the option, a source tracking the matter told BusinessLine.
Talks with UAE soon
“The Department of Financial Services will hold consultations on the matter once the partner countries are ready to talk. The MEA had sent a paper on rupee trade to a number of Indian embassies and consulates in several countries and received good feedback. Talks with the UAE and a couple of more countries are expected soon,” the source added.
World currency reserves shrink by $1 trillion in record drawdownReserves have declined by about $1 trillion, or 7.8 per cent, this year to $12 trillion
The Reserve Bank of India allowed invoicing and payments for international trade in rupee in July this year “to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR.”
While rupee trade with countries facing economic sanctions from Western nations, primarily Russia, will help in continuing seamless bilateral trade, it would also help India and its trading partners in checking outflow of the US dollar and strengthen the domestic currency.
“India is getting a good response for its proposal for rupee trade from many countries that are grappling with hard currency deficit. Neighbouring countries such as Sri Lanka and Maldives are very interested. New Delhi is also engaging with countries in Africa and Latin America such as Nigeria, Zimbabwe and Argentina,” the source said.