DGFT opens door wider for rupee-settled exports
In Short
The Directorate General of Foreign Trade amends provisions to facilitate export invoicing and realization in Indian rupees across all global destinations.
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DGFT opens door wider for rupee-settled exports
New Delhi: The government on Thursday amended certain provisions of the Foreign Trade Policy to make it easier for exporters to invoice overseas sales and receive payments in Indian rupees.
The amendments cover exports to all countries, although the rules vary by destination. Two paragraphs of the Foreign Trade Policy (FTP) 2023 have been amended “to align the provisions relating to denomination of export contracts and eligibility for FTP benefits in respect of export realisation in Indian Rupees with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2023”, the Directorate General of Foreign Trade (DGFT) said in a notification.
For countries outside the Asian Clearing Union (ACU), export contracts and invoices may now be denominated in any foreign currency or Indian rupees.
Earlier, export earnings generally had to be received in a freely convertible currency. Commenting on the notification, economic think tank GTRI said eligible rupee payments for exports to any country other than Nepal and Bhutan will now qualify for FTP benefits and count towards fulfilment of export obligations.
Rupee earnings received through approved banking channels will therefore be treated on par with export payments received in foreign currency, it said, adding that exports financed through EXIM Bank or Government of India lines of credit may also be invoiced in Indian rupees.
The ACU is a regional payment arrangement established in 1974 to facilitate trade settlements and reduce repeated transfers of foreign exchange by periodically settling the net obligations of its members.
