The Daily Populous Wednesday August 13rd, 2025 evening edition
Authored by financialexpress.com and submitted by Mundane-Laugh8562

In a step to promote international trade in Indian Rupees (INR), the Reserve Bank of India (RBI) has announced that Authorised Dealer (AD) banks no longer need permission from the RBI before opening Special Rupee Vostro Accounts (SRVAs) for foreign banks. This move aims to speed up the opening and use of these accounts, helping facilitate rupee-based trade settlements.

India’s INR Trade Push amid Rising US Tariff Threats

However, with this move, India is taking a step against US President Donald Trump, who had previously threatened to impose 100 per cent tariffs on BRICS countries if they moved ahead with their own currency to rival the US dollar. China and Russia are already trading in their local currencies, and they are also pushing to create their own currency for trade among BRICS countries.

Trump has already slapped a 50 per cent tariff on India, citing the continued large trade of crude oil with Russia. Recently, Trump also threatened a 10 per cent tariff on “any country aligning themselves with the anti-American policies of BRICS.” “There will be no exceptions to this policy,” Trump wrote on social media.

Exports and Imports Now Settled Directly in India Rupees

In its circular issued on Aug 5, RBI highlights that this decision is effective from immediate and is extension to the previous order issued on July 11, 2022. Under this framework, exports and imports can now be invoiced and settled directly in Indian Rupees. The exchange rate between the trading partner countries will be determined by market forces, allowing for greater flexibility.

ALSO READ RBI simplifies process for opening special rupee accounts to boost rupee trade

The previous process, which required AD banks to seek RBI permission before opening SRVAs. The new guideline allows banks to open these accounts independently.

However, the RBI has clarified that banks must still follow all existing regulations and due diligence processes under the Foreign Exchange Management Act (FEMA) and Know Your Customer (KYC) norms.

The central bank believes this change will significantly quicken the setting up of SRVAs, making it easier to operationalise trade settlements in rupees.

StarsInTears on August 13rd, 2025 at 13:41 UTC »

Is every thing the Government of India does will now be commented upon as if it is related to Trump? India has been working on conducting trade in local currencies for decades now, here's an article from 2013 talking about it. Was Indian defying Obama then? Lazy "journalists" relying on sensationalism to get clicks.

SKAOG on August 13rd, 2025 at 09:23 UTC »

The issue is that nearly all other countries do not have any use for Indian Rupees. And even if they accumulate rupees, the Indian government counter productively makes it complex to invest rupees in Indian stocks and bonds with taxes and regulation.

Unless the rupee is fully convertible, I don't see much room for widespread usage.

Mundane-Laugh8562 on August 13rd, 2025 at 09:09 UTC »

SS: In a step to promote international trade in Indian Rupees (INR), the Reserve Bank of India (RBI) has announced that Authorised Dealer (AD) banks no longer need permission from the RBI before opening Special Rupee Vostro Accounts (SRVAs) for foreign banks. This move aims to speed up the opening and use of these accounts, helping facilitate rupee-based trade settlements.

However, with this move, India is taking a step against US President Donald Trump, who had previously threatened to impose 100 per cent tariffs on BRICS countries if they moved ahead with their own currency to rival the US dollar. China and Russia are already trading in their local currencies, and they are also pushing to create their own currency for trade among BRICS countries.

Trump has already slapped a 50 per cent tariff on India, citing the continued large trade of crude oil with Russia.

In its circular issued on Aug 5, RBI highlights that this decision is effective from immediate and is extension to the previous order issued on July 11, 2022. Under this framework, exports and imports can now be invoiced and settled directly in Indian Rupees. The exchange rate between the trading partner countries will be determined by market forces, allowing for greater flexibility.