The Directorate General of Foreign Trade (DGFT) has eased rules governing rupee-denominated export transactions, giving Indian exporters greater flexibility to invoice and settle overseas sales in Indian rupees and potentially widening the use of the currency in international trade.
Under the revised provisions, exporters selling to countries outside the Asian Clearing Union (ACU) can denominate export contracts and invoices in either Indian rupees or foreign currency. Export payments can also be received in either currency, subject to the applicable banking and regulatory framework.
A key change is that eligible export proceeds received in rupees through approved banking channels will receive treatment comparable to foreign-currency export earnings for the purposes of Foreign Trade Policy benefits and fulfilment of export obligations. The move removes a potential disincentive for exporters considering rupee-based international transactions.
The revised framework also permits exports backed by EXIM Bank or Government of India lines of credit to be invoiced in Indian rupees. This could provide additional flexibility for exporters participating in government-supported overseas projects and trade arrangements .
The policy adjustment builds on India’s broader effort to promote the internationalisation of the rupee. The RBI’s existing framework allows international trade transactions to be invoiced and settled in INR through Special Rupee Vostro Accounts (SRVAs) maintained by authorised dealer banks.
The government has progressively expanded the framework since 2022. DGFT had earlier amended the Foreign Trade Policy to allow international trade settlement in INR and extend export benefits and fulfilment of export obligations to eligible rupee realisations.
The latest move is aimed at making rupee-based trade more attractive to exporters and their overseas buyers. By allowing eligible rupee receipts to qualify for trade-policy benefits, the government expects more businesses to consider the currency for cross-border transactions.
Rules continue to differ for countries covered by the Asian Clearing Union, while Nepal and Bhutan have separate provisions. Transactions involving Iran will also remain subject to restrictions applicable to sensitive goods and technologies under India’s Foreign Trade Policy.
For Indian exporters, wider acceptance of INR could reduce dependence on freely convertible currencies for eligible transactions and offer greater flexibility in negotiating payment terms with overseas buyers. For India, increased rupee-based settlement could support the broader objective of strengthening the currency’s role in global trade.
The move comes as India seeks to expand its export markets and build a more diversified international payment ecosystem, with rupee-based settlement emerging as an additional option alongside conventional foreign-currency transactions.