Rules eased to help exporters receive payments in rupees

New Delhi: India on Thursday eased rules on rupee export payments to make it easier for exporters to invoice overseas sales and receive payments in Indian currency, putting them on par with foreign-currency earnings for trade-policy benefits, aiming to promote wider use of the local currency in global trade.

The Directorate General of Foreign Trade (DGFT) amended the Foreign Trade Policy (FTP) allowing export contracts, invoices and payments with non-Asian Clearing Union (ACU) countries to be denominated and settled in rupee or foreign currencies. The nine-member ACU is a regional payment arrangement established in 1974 to facilitate trade settlements and reduce repeated transfers of foreign exchange by periodically settling the net obligations of its members namely Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka.

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In a notification, the DGFT said it amended the policy "to align the provisions relating to denomination of export contracts and eligibility for FTP benefits in respect of export realisation in Indian rupees with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2023". Earlier, export earnings generally had to be received in a freely convertible currency.

Economic think tank GTRI said eligible rupee payments for exports to any country other than Nepal and Bhutan will now qualify for FTP benefits and count towards fulfilment of export obligations.