India and Indonesia just made their dollar breakup a little more official. The Reserve Bank of India and Bank Indonesia signed a Memorandum of Understanding on March 7, 2024, establishing a Local Currency Settlement Systems framework that lets bilateral trade be invoiced and settled directly in Indian Rupees and Indonesian Rupiah.
The agreement is getting fresh attention now as Indian Prime Minister Narendra Modi visits Jakarta for talks with Indonesian President Prabowo Subianto. Indonesian Embassy deputy chief of mission Yudho Sasongko described economic integration, supply chains, and maritime ties as the core pillars of the bilateral relationship.
The numbers behind the de-dollarization push
Indonesia’s local currency transaction volumes surged 163% year-on-year, hitting $8.45 billion in just the first two months of 2026.
The LCSS framework means Indian exporters shipping goods to Indonesia can now receive payment in rupees instead of converting through the dollar. Indonesian importers, meanwhile, can pay in rupiah.
