DGFT amends trade rules to expand Indian rupee use in exports

The Directorate General of Foreign Trade (DGFT) has amended the Foreign Trade Policy (FTP) 2023 to facilitate increased use of the Indian rupee in international commerce. The revised provisions allow exporters to denominate contracts and invoices in Indian rupees or foreign currency for countries outside the Asian Clearing Union (ACU), with proceeds being realizable in either currency.

A significant aspect of this amendment is that eligible rupee-denominated payments received through authorized banking channels will now qualify for export benefits, incentives, and the fulfillment of export obligations. This change aligns the FTP 2023 with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.

The move is intended to provide Indian businesses with greater flexibility, reduce exchange-rate risks, and decrease reliance on traditional foreign-currency settlements like the US dollar. While the policy expands rupee-based trade, specific provisions remain for ACU member countries, Nepal, Bhutan, and transactions involving Iran.