It all started to gain more momentum and recognition after the successful and historic G20 summit held in New Delhi just a few days back, giving hope for multilateralism.
While political tensions may have temporarily halted Free Trade Agreement (FTA) negotiations between India and Canada, India remains fearless. With 22 other nations engaged in talks for executing bilateral trade in Rupees, India’s economic horizons continue to expand.
In a written reply in Lok Sabha, Union Minister of State (External Affairs) Rajkumar Ranjan Singh listed out the names of these 22 nations, including Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, Bangladesh, Maldives, Kazakhstan and the United Kingdom.
Recently, India has been working to make it easier to use as well as encourage the Indian rupee for international transactions and has set up Special Vostro Rupee Accounts (SVRAs) in domestic banks, facilitating the exchange of national currencies, through collaborations with banks from 22 different countries.
Around the world, there are over 350 free trade agreements between the members of the World Trade Organization. These FTAs aim to make it easier for countries to trade goods and services with each other by mutual elimination of duties.
The Reserve Bank of India (RBI) has given the green light for banks from 18 different countries to open Special Vostro Rupee Accounts, which help settle payments in Indian Rupees.
In fact, India has already started trading in Rupees with some of its neighbouring countries like Nepal and Bhutan.
Now, “rupee trade mechanism” has been initiated to facilitate trade in Rupees with Russia. In fact, the Reserve Bank has approved 34 applications from various Russian banks to open these SVRA in 14 different Indian commercial banks, as of July 2.
The major reason behind the trading in Rupees is that many of those countries are running short on dollar reserves, and they see the Indian rupee as a stable currency, as mentioned by FM Nirmala Sitharaman in an interview.
This will mean India has a big opportunity to grow and play a more significant role in the global economy.
Written By Shivani Singh
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