Finance Minister Nirmala Sitharaman said on Tuesday that the international rupee trade settlement mechanism is opening the Indian economy, and several countries are showing interest and thinking that "it's possible to trade in rupee".
Referring to the Reserve Bank of India's mechanism to enable international trade settlement in rupee, Sitharaman said, "I'm glad RBI came up with this formulation at a time which was so critical." She was speaking at the Hero Mindmine Summit.
On July 11, RBI said that it had decided to put in place an additional arrangement for invoicing, payment and settlement of exports or imports in the Indian rupee.
Under the new arrangement, all exports and imports can be denominated and invoiced in the Indian rupee. "Indian exporters, undertaking exports of goods and services through this mechanism, shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country," the RBI had said.
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Data has suggested that the Indian rupee has been better placed against the US dollar than its counterparts. On Tuesday, the Indian rupee surged to 79.06, over a one-month high against the dollar.
On opening up and sustaining the Indian economy in challenging times, Sitharaman said, "The post-pandemic India is coming up with so many out-of-the-box solutions."
She said India was willing to have a digital platform become interoperable between countries to enable cross-border transactions.
The finance minister said in three to four years, India built capacity on industry 4.0, digital payments and digitisation in agriculture and that the focus in the next 25 years would be on greater digitisation.