Foreign media: India sets out measures to internationalise the rupee as an alternative to US dollar settlement: India's native payment channel

Indian rupee (file photo)

As India's international trade and investment flows increase, New Delhi is taking steps to make the Indian rupee a strong international currency, aiming to replace the US dollar in international trade settlements, the TASS Russian news agency reported on 6 June.

The Reserve Bank of India (RBI) released a report on 6 June stating that the Indian rupee has the potential to become an internationalised currency given that India is one of the fastest growing economies. Measures proposed include adopting a standardised approach to enhance the use of the rupee in bilateral and multilateral trade, using the Indian rupee as an additional settlement currency in multilateral mechanisms such as the Asian Clearing Union (ACU), encouraging non-residents to open rupee accounts domestically and abroad, and integrating India's payment system with cross-border transactions in other countries.The RBI suggests that Indian exporters using the rupee in trade settlements should be provided a "fair incentives".

Discussions on the internationalisation of the rupee have intensified recently as a result of Western sanctions against Russia.2022 In July, the Reserve Bank of India introduced a mechanism for settling Russian-Indian trade in rupees. Under this arrangement, exports and imports can be denominated and invoiced in Indian rupees, with the exchange rate between the two currencies determined by the market. This mechanism allows settlement through special rupee accounts in domestic and foreign banks. (Overseas, Hou Xingchuan)