In a significant policy shift, the Reserve Bank of India (RBI) has taken decisive steps to expand the adoption of the Indian rupee (INR) for international trade settlements, bolstering its global economic footprint and reducing dependency on the U.S. dollar. On 13 August, the RBI simplified and accelerated rupee-denominated trade with Russia by relaxing procedures around Special Rupee Vostro Accounts (SRVAs). Indian importers can now pay directly in INR, which is converted to roubles and held in Russian banks in India, reducing transaction costs, limiting exposure to U.S. sanctions, and bypassing the limitations of SWIFT-based systems.
Since 2022, India has opened 156 SRVAs across 26 Indian banks with correspondent entities in 30 countries, holding a balance of ₹134.55 billion as of December 2024. Recognizing limitations in liquidity management, the RBI has sought government approval to lift the 30% cap on short-term sovereign debt investments, such as treasury bills, by SRVA holders — a move expected to enhance the attractiveness and functionality of rupee settlements.
Beyond Russia, India has deepened rupee trade arrangements with the UAE and signed memoranda of understanding with countries such as the Maldives, reflecting a growing ambition to internationalise the rupee. While a common BRICS currency remains a distant prospect, these bilateral frameworks underline India’s incremental and pragmatic approach to diversifying global trade currencies.
By removing approval bottlenecks, easing investment restrictions, and expanding currency partnerships, India is reinforcing the rupee’s role in cross-border trade. This cautious yet strategic push positions the country for greater financial sovereignty, improved operational efficiency, and stronger resilience in the evolving global economic order.
