India Eases Rules for Rupee-Based Export Settlements

The Directorate General of Foreign Trade amended the Foreign Trade Policy 2023 on August 20, 2026, to allow Indian exporters to denominate contracts and receive payments in Indian rupees (INR) for sales to countries outside the Asian Clearing Union (ACU). This regulatory shift aligns trade rules with 2023 Reserve Bank of India foreign-exchange regulations and the Special Rupee Vostro Account mechanism.

Under the new framework, rupee payments received through approved banking channels now qualify for trade policy benefits and count toward export obligations, removing previous uncertainties regarding rupee-denominated receipts. The policy also extends to exports financed through Government of India lines of credit or EXIM Bank. However, exports to ACU members—including Bangladesh, Iran, Maldives, Myanmar, Pakistan, and Sri Lanka—remain subject to currencies determined by the ACU or Reserve Bank of India directions.

The initiative aims to internationalize the rupee, reduce currency conversion costs, and provide alternatives for nations facing US dollar shortages. Despite the regulatory easing, the Global Trade Research Initiative and other analysts note that widespread adoption depends on commercial viability. Specifically, success relies on the ability of foreign buyers to acquire rupees and the willingness of foreign banks to manage rupee balances.