Govt Allows Trade Settlement in RUPEE for Claiming EXPORT INCENTIVEs
The Directorate General of Foreign Trade (DGFT) with its Notification No 43/2015-2020 Dated 9th November 2022 (Wednesday) notified norms allowing exporters to avail export incentives under the foreign trade policy (FTP), even on realisation in Indian Rupees (INR). As per the notification, the DGFT, under the Ministry of Commerce and Industry, has allowed invoicing, payment & settlement of imports and exports in INR. This move is aimed at facilitating trade in domestic currency.
In July 2022, the Reserve Bank of India (RBI) had requested banks to make additional arrangements for import/export transactions in INR considering the increasing interest of global trading community in the domestic currency.
The DGFT notification said that “The Government of India has made suitable amendments in the Foreign Trade Policy and Handbook of Procedures to allow for International Trade Settlement in Indian Rupees (INR) i.e., invoicing, payment, and settlement of exports/imports in Indian Rupees. Accordingly, the Directorate General of Foreign Trade (DGFT) had earlier introduced Para 2.52(d) vide Notification No. 33/2015-20 dated 16.09.2022 to permit invoicing, payment and settlements exports and imports in INR in sync with RBI’s A.P. (DIR Series) Circular No.10 Dated 11th July 2022″
The notification highlighted changes announced in the Foreign Trade Policy (FTP) for grant of export incentives, fulfilment of Export Obligation (EO), and for export payment realisations in INR as per the RBI guidelines released in July 2022.
This decision would definitely facilitate ease in international trade transactions in INR considering the growing interest in internationalisation of Indian Rupee.
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