Foreign Trade Policy: Rules for Rupee Trade Settlement for Exporters

The Department of Commerce has integrated mechanisms within the Foreign Trade Policy (FTP) to facilitate international trade settlements in Indian Rupees (INR). This initiative, aligned with the Reserve Bank of India's (RBI) guidelines, allows Indian exporters to settle their invoices in the home currency, significantly reducing exchange rate risks and transaction costs. The move is designed to simplify trade with countries experiencing foreign exchange shortages. As per DGFT Notification No. 33/2023, export benefits under various schemes, including RoDTEP and Advance Authorization, are now accessible for exports where the realization is in Rupees through the Special Vostro Account mechanism. This ensures that exporters opting for local currency settlement do not lose out on federal incentives. ## What this means for exporters Exporters should consult their Authorized Dealer (AD) banks to verify if their buyers' countries are eligible for the Vostro account settlement. It is critical to ensure that the eBRC (Electronic Bank Realization Certificate) correctly reflects the INR settlement to claim FTP incentives without technical glitches. This policy provides a strategic buffer against global currency volatility and strengthens the international presence of the Indian Rupee.