Finance Minister Nirmala Sitharaman has initiated bilateral trade discussions with 22 different countries, marking a significant move towards strengthening India’s global trade partnerships. In an exclusive interview on Friday, she revealed India’s strategic collaboration with these nations for executing bilateral trade transactions in Rupees.

The South Asian country has established special rupee vostro accounts within domestic banks, thus facilitating the exchange of national currencies through collaborations with banks.

The Reserve Bank of India (RBI) has granted permission for banks from 18 countries for the purpose of settling payments in Rupee, the Central government told the Rajya Sabha. BJP’s MP Sushil Kumar Modi, Bhagwat Karad, the Union Minister of State for Finance, explained that banks from partner countries can establish SVRAs by engaging authorized dealers to obtain from the RBI.

Foreign Secretary Vinay Kwatra expressed optimism about discussions related to national currencies during the recent BRICS Summit held in Johannesburg. The Prime Minister’s visit to South Africa further underscored India’s commitment to fostering economic cooperation within the BRICS (Brazil, Russia, India, China, South Africa) bloc.

By facilitating trade settlement in national currencies, India is likely to reduce its dependence on major global reserve currencies like the US Dollar. This move aligns with the broader global trend of countries seeking to diversify away from the dollar to minimize exposure to currency exchange rate fluctuations and the influence of the US financial system.

India’s interest in holding national currencies within BRICS (Brazil, Russia, India, China, South Africa) member nations could significantly enhance economic cooperation within the group, thereby reducing reliance on external currencies and fostering greater financial independence.

The success of these efforts will depend on the willingness of partner countries to participate and the development of the necessary financial infrastructure. This initiative offers countries more control over their trade policies and enhances currency stability.

Nirmala Sitharaman’s engagement with these 22 countries reflects India’s commitment to strengthening its position in the global trade landscape while promoting economic cooperation with key partners.

-Uttara Singh Chauhan