NEW DELHI: The Indian rupee is now going global, with 18 countries agreeing to trade in it. In the midst of a global economic slowdown, the world is attempting to de-dollarize the international market, and India is seizing the opportunity. Traders can now pay in rupees to import goods from other countries.
The RBI has allowed 18 countries, including Germany, Kenya, Sri Lanka, Singapore, the United Kingdom, and many others, to transact in rupees. These countries will invest in Indian companies and purchase goods and services from India. It will lower trade transaction costs and increase trade.
Because India is one of the most important trading partners for many countries, using the Rupee as a settlement and invoicing currency reduces the exchange rate risks that these traders face in the international market.
It will also help India reduce its trade deficit. From April 2022 to January 2023, India’s merchandise trade deficit (export minus import) was $233 billion. Because more countries are willing to trade in rupees, India will be able to export more. It will increase trade with South Asian countries like Nepal and Bhutan.
Furthermore, it will aid in the development of financial markets.
Following the Western world’s sanctions against Russia, the BRICS countries have already attempted to de-dollarize the international market.
As a result, China has the opportunity to emerge as a potential alternative to the United States.