India is seeking to ride on bilateral trade pacts to internationalise the rupee and reduce dependency on the dollar. Besides tariff levels and the removal of measures and provisions that act as trade barriers, India has now thrown currency into this mix as a matter of strategic interest.
Key nations in Latin America and Africa are likely to be the next set of candidates for India’s bilateral local currency settlement push as it aims to first convince smaller countries to accept transactions in rupees
India has been looking to encourage the use of the Rupee to settle international trade transactions. However, progress has been slow, with the government and the Reserve Bank of India treading carefully to ensure there aren t any unintended consequences
While many businesses - driven by commercial convenience, balance of payments, and terms of global reinsurers - often prefer to deal in hard, convertible currencies, New Delhi is pursuing its aim to internationalise the local currency.