India's central bank and regulatory body responsible for regulation of the Indian banking system the Reserve Bank of India announced that in order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment and settlement of exports & imports in INR. The above instructions shall come into force with immediate effect. The broad framework for cross border trade transactions in INR under Foreign Exchange Management Act 1999 is as delineated below 1. Invoicing: All exports and imports under this arrangement may be denominated and invoiced in Rupee 2. Exchange Rate: Exchange rate between the currencies of the two trading partner countries may be market determined 3. Settlement: The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down In order to allow settlement of international trade transactions through this arrangement, it has been decided that 1. Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller or supplier 2. Indian exporters, undertaking exports of goods and services through this mechanism, shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country The export & import undertaken and settled in this manner shall be subject to usual documentation and reporting requirements. Letter of Credit and other trade related documentation may be decided mutually between banks of the partner trading countries under the overall framework of Uniform Customs and Practice for Documentary Credits and incoterms. Exchange of messages in safe, secure, and efficient way may be agreed mutually between the banks of partner countries. Before putting in place this mechanism, AD banks shall require prior approval from the Foreign Exchange Department of Reserve Bank of India
India's central bank and regulatory body responsible for regulation of the Indian banking system the Reserve Bank of India announced that in order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment and settlement of exports & imports in INR. The above instructions shall come into force with immediate effect. The broad framework for cross border trade transactions in INR under Foreign Exchange Management Act 1999 is as delineated below 1. Invoicing: All exports and imports under this arrangement may be denominated and invoiced in Rupee 2. Exchange Rate: Exchange rate between the currencies of the two trading partner countries may be market determined 3. Settlement: The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down In order to allow settlement of international trade transactions through this arrangement, it has been decided that 1. Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller or supplier 2. Indian exporters, undertaking exports of goods and services through this mechanism, shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country The export & import undertaken and settled in this manner shall be subject to usual documentation and reporting requirements. Letter of Credit and other trade related documentation may be decided mutually between banks of the partner trading countries under the overall framework of Uniform Customs and Practice for Documentary Credits and incoterms. Exchange of messages in safe, secure, and efficient way may be agreed mutually between the banks of partner countries. Before putting in place this mechanism, AD banks shall require prior approval from the Foreign Exchange Department of Reserve Bank of India
