The government has started trade in the rupee with neighbouring countries, including Nepal and Bhutan, Parliament was informed on Wednesday.
Replying to a question in the Lok Sabha, Minister of State for Commerce and Industry Anupriya Patel said a significant part of the India-Nepal trade is being carried out in Indian Rupee (INR) and all bilateral trade with Bhutan is also transacted entirely in INR.
"Rupee trade mechanism has been initiated to facilitate trade in national currency with Russia. As of July 2, RBI has approved 34 applications from different Russian banks for opening SRVA in 14 Indian commercial banks," the minister said in a written reply.
RBI has issued guidelines for opening Special Rupee Vostro Accounts (SRVA) by foreign banks in Indian commercial banks.
She said Sri Lanka has included INR in its list of designated foreign currencies.
Authorised dealer (AD) banks in India have been permitted to open rupee vostro accounts.
Accordingly, these accounts "of eight corresponding banks from Sri Lanka have been opened with respective AD banks in India, with prior approval of the RBI," she added.
With Iran, she said that an arrangement to facilitate bilateral trade payments between India and Iran was adopted on November 5, 2018.
India and Bangladesh have also formally launched a new mechanism to settle trade in INR on July 11.
Two Indian and Bangladeshi banks each have been designated to settle bilateral trade in INR.
These are SBI and ICICI Bank from India; and Sonali Bank PLC and Eastern Bank Ltd from Bangladesh.
"To formally launch trade in INR, a formal Exchange of the Letters of Credit, i.e, LC documents in INR between the first exporter and importer through their banks was also carried out on July 11, 2023," she said.