New Delhi: In a significant decision, the Directorate General of Foreign Trade (DGFT) has eased rules governing Rupee-based export transactions, allowing Indian exporters greater flexibility in invoicing overseas sales and receiving payments.
Under the revised framework, eligible rupee receipts will qualify for trade-policy benefits and count towards fulfilment of export obligations.
The changes amend the Foreign Trade Policy (FTP) 2023 to align provisions on export contract denomination and eligibility for FTP benefits with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.
DGFT issued the notification on Thursday, setting out revised provisions for rupee-denominated export transactions.
For exports to countries outside the Asian Clearing Union (ACU), contracts can now be invoiced in rupees or any foreign currency, with payments permitted in either currency.
Rupee payments received through approved banking channels for exports to countries other than Nepal and Bhutan will qualify for FTP benefits and count towards export obligations.
The notification also permits exports financed through EXIM Bank or Government of India lines of credit to be invoiced in rupees.
This expands the scope for exporters to use the Indian currency in eligible international transactions while retaining access to benefits available under the trade policy.
There are separate provisions for ACU countries, which include Bangladesh, Bhutan, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka.
For exports to Bangladesh, Iran, Maldives, Myanmar, Pakistan and Sri Lanka, contracts must use a currency determined by the ACU, while invoicing and settlement may also follow directions issued by the Reserve Bank of India.
Nepal and Bhutan are governed by separate provisions, with export contracts generally required to be denominated and settled in Indian rupees or in accordance with RBI directions.
For Iran, trade involving sensitive goods and technologies remains subject to provisions covering specified items linked to nuclear activities. (BVI)
