In a major relief to the exporters, the Ministry of Commerce and Industry has notified the change in the Foreign Trade Policy 2015-2022 comes after the Reserve Bank of India had, on 11th July 2022, issued guidelines for the settlement of international trade in Indian rupees.
Following this, the central government has made changes to the Foreign Trade Policy 2015-22 also to allow for rupee settlement of international trade for export promotion schemes immediately. The scheme would include benefits, incentives, and fulfilment of export obligation under the Foreign Trade Policy can be extended to export payments made in Indian rupees, as outlined by the Reserve Bank of India (RBI) on 11th July 2022 wherein it had announced the setting up of a mechanism to settle global trade in rupees.
Given the rise in interest in internationalisation of Indian Rupee, this Policy amendments have been undertaken to facilitate and to bring ease in international trade transactions in Indian Rupees, for Indian EXIM business entities.
Further, the changes have been notified for imports and exports. The changes aim at increasing export performance for recognition as Status Holders, realisation of export proceeds under advance authorisation & Duty-Free Import Authorisation schemes, and realisation of export proceeds under export promotion capital goods scheme(EPCG).
Under the mechanism, all exports and imports may be denominated and invoiced in rupees, with the exchange rate between the currencies of the two trading partner countries to be market determined.
To settle these transactions, authorised Indian banks have to open Special Rupee Vostro Accounts of correspondent banks of the partner trading country.Subscribe Taxscan Premium to view the Judgment