India to use G20 gathering to push rupee trade

India will use the G20 platform to push international trade settlement in rupees, especially with countries that are facing currency issues, commerce secretary Sunil Barthwal said on Monday.  

“We are interested in improving the trade with respect to the currencies of the countries which are trading (with India). Definitely, we would like to see that rupee trade also happens, particularly (with) those countries which are facing (currency) issues,” Barthwal said on the eve of the first trade and investment working group meeting here.  

He was answering a question whether India plans to use the G20 gathering to boost rupee trade. The Group of Twenty or G20 is the forum for international economic cooperation and plays an important role in shaping and strengthening global architecture and governance on all major international economic issues. India holds the presidency of the G20 from 1 December 2022 to 30 November 2023.  

Over 100 delegates from G20 member countries, invitee countries, regional groupings and international organizations are expected to participate in the first trade and investment working group meeting.  

“The aim under India’s G20 presidency is to build a shared understanding of the challenges being faced in accelerating global trade and investment, and how existing opportunities can be harnessed to formulate human-centric concrete outcomes and deliverables,” the Ministry of Commerce and Industry said in a statement on Monday. 

As per data presented in the Parliament on 14 March, RBI has approved domestic and foreign authorized dealer banks in 60 cases for opening of special rupee vostro accounts (SRVAs) of correspondent banks from 18 countries. These include Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, and United Kingdom, junior finance minister Bhagwat Karad said in the Rajya Sabha.   

Under the mechanism, Indian importers will make payments in rupees that will be credited to the vostro account of the correspondent bank of the partner country. Similarly, Indian exporters will be paid the proceeds in rupees from the balances in the vostro account. RBI has allowed the surplus rupee balance in these accounts to be used for payments for projects and investments, export, import advance flow management, and investments in government securities. 

On the first day, 28 March, an international conference on trade finance will be held. The role of banks, financial institutions, development finance institutions and export credit agencies in closing the trade finance gap, and how digitalisation and fintech solutions can improve access to trade finance will be discussed through two panel discussions, the commerce ministry statement said. 

On 24 March, Mint reported citing a statement by commerce secretary Barthwal that India will seek a better dispute settlement mechanism at the World Trade Organization (WTO) and plans to initiate the issue of reforms in the global trade body during G20 talks this year.