India Seeks to Promote Rupee Trade Settlements to Help Countries Facing Foreign Currency Shortages: Sitharaman

New Delhi, Oct 17 (KNN) India is promoting trade settlements in rupees and local currencies to help partner countries facing shortages of hard currencies continue importing essential goods, Finance Minister Nirmala Sitharaman said on Friday.

Speaking at an interaction organised by the Atlantic Council on the sidelines of the IMF-World Bank annual meetings in Bangkok, Thailand, Sitharaman noted that countries facing foreign currency constraints often struggle to maintain imports despite their need for essential goods.

“One of the things that we in India want to do is to settle in rupee, whatever the payment is got to be done by those countries which import goods from us,” she said, PTI reported.

Sitharaman highlighted that India was working to facilitate such arrangements to keep trade flowing with countries facing foreign exchange constraints.

“Rupee and local currency settlements are something which we want to do for the benefit of countries which are starved of hard currencies but yet need to import some goods, and, therefore, rupee trade is trying to make it possible...for local currency settlements to keep trade going,” she added.

The finance minister noted that geopolitical tensions and economic downturns had pushed several countries into debt and balance of payments crises, while multilateral development institutions often took three to four years to respond to such challenges.

India Seeks Changes To ASEAN Trade Agreement

Sitharaman also said India was pursuing stronger bilateral partnerships and making progress on several trade agreements.

However, she described India's trade agreement with the Association of Southeast Asian Nations (ASEAN) as skewed against the country, saying the arrangement needed to address concerns faced by Indian importers, domestic markets and manufacturers.

The two sides are reviewing the agreement, and India wants to continue it in a “slightly refashioned manner”, she said.

India Stands By Decision To Stay Out Of RCEP

The Finance Minister reiterated that India had consciously stayed out of the Regional Comprehensive Economic Partnership (RCEP), as the agreement did not offer sufficient benefits to the country.

India continues to trade with RCEP member countries, but joining the agreement would not be in its interest, she said.

India withdrew from RCEP negotiations in November 2019 over concerns about cheaper imports, particularly from China, widening trade deficits and inadequate safeguards for domestic industries and agriculture.

(KNN Bureau)