India will start using the rupee in trade settlements with Russia from next week, the head of the Federation of Indian Export Organizations, Ajay Sahay, said. This is reported by Prime news agency.

In early November, the Indian government authorized the use of the national currency in international trade settlements to promote exports within the framework of foreign trade policy. As noted by the Ministry of Commerce, these amendments were adopted to simplify and facilitate international trade transactions in Indian rupees, given the growing interest in the internationalization of the Indian national currency.

The Central Bank of India in mid-July issued a circular on trade settlements between India and other countries in rupees. Thus, Indian importers must make payments in local currency, which will be credited to a special correspondent bank account of the partner country on invoices for the supply of goods or services from a foreign supplier. Payments to exporters will be made from the account balances.

“A number of issues have been sorted out. Exporters and importers have started approaching banks to open accounts (in rupees). Trade settlement with Russia under the new payment system is expected from next week for some supplies,” Sahay said.

An unnamed government official added that to facilitate settlement of international trade in rupee between India and Russia, five to six banks have been allowed to open special corre accounts.

“About 10-11 vostro accounts have been opened. For example, six vostro accounts have been opened with IndusInd Bank, which means six different Russian banks have opened accounts with this bank,” a government official said on condition of anonymity.