India Forges Ahead on Non-Dollar Trade Arrangements

April 22, 2023, 2022 (EIRNS)—India’s new Foreign Trade Policy for 2023 is centered around boosting the use of the rupee, and moving away from the dollar, for foreign trade. So far, India has established rupee trade mechanisms with Iran for crude oil imports, along with 17 other countries, including Russia and Malaysia.

On April 17, according to Dhaka’s online daily, The Business Standard, Bangladesh became the 18th country. The $2 billion or so in exports from Bangladesh to India will be completely transacted in rupees and takas, while only an initial $2 billion or so of exports from India to Bangladesh, about 15% of last year’s total, will be in rupees. For now, the balance is still in dollars.

Each of Bangladesh’s Sonali and Eastern Banks and India’s ICICI Bank and the State Bank of India and will open accounts with each other. Afzal Karim, CEO and managing director of Sonali Bank, said more banks will join in these arrangements later on, and that the use of the domestic currencies will ease the pressure on their dollar holdings. Abdul Matlub Ahmad, the president of the Bangladesh-India Chamber of Commerce and Industry, welcomed the arrangement, while warning that procedural steps will still take a few months to finalize.