This article examines the recent amendments to India’s Foreign Trade Policy that enable exporters to receive payments in Indian rupees.
Changes to Export Payment Regulations
The recent amendment to the Foreign Trade Policy (FTP) 2023 by the Indian government simplifies the invoicing process for exporters, allowing them to receive payments in Indian rupees. This change aligns eligible rupee payments with foreign-currency earnings, ensuring that exporters can now invoice in rupees for exports to all countries, with specific provisions for Asian Clearing Union (ACU) member nations, Nepal, and Bhutan. Previously, export proceeds had to be received in freely convertible foreign currency, which posed challenges for many exporters. The Directorate General of Foreign Trade (DGFT) has clarified that rupee payments received through approved banking channels will now qualify for FTP benefits, thus reducing uncertainty for exporters regarding compliance with export obligations.
Implications for Exporters and Trade
The amendment is expected to significantly impact Indian exporters by reducing currency-conversion costs and mitigating exchange-rate risks. This is particularly relevant for trade with countries that may experience dollar shortages or have difficulty accessing established international payment systems. Economic think tank GTRI highlighted that rupee payments will now be treated on par with foreign-currency earnings, thus facilitating smoother trade transactions. However, the effectiveness of this amendment hinges on the ability of foreign buyers to acquire rupees easily and the provision of practical options for overseas banks to use, invest, convert, or repatriate their balances. Without these supporting mechanisms, the potential for large-scale rupee trade may remain limited.
Specific Rules for ACU Member Countries
For exports to ACU member countries such as Bangladesh, Iran, and Pakistan, the regulations stipulate that contracts must be denominated in a currency determined by the ACU. However, invoicing and settlement can also follow guidelines issued by the Reserve Bank of India (RBI). Notably, export contracts with Nepal and Bhutan must generally be denominated in Indian rupees or according to RBI directions. The amendment also maintains compliance with international obligations concerning sensitive goods and technologies, particularly in trade with Iran. This careful delineation of rules reflects India’s strategic approach to enhancing its trade relationships while adhering to international standards.
IN NUMBERS
The recent amendments to India’s Foreign Trade Policy represent a significant shift in how exporters can engage in international trade, potentially broadening the use of the Indian rupee in global transactions.
Reported from economictimes.indiatimes.com, 2026-08-20. The Tender Wire is published by Otnox.
