The notification also permits exports financed through EXIM Bank or Government of India lines of credit to be invoiced in Indian rupees
| Photo Credit:
Mayur Kakade
The Directorate General of Foreign Trade (DGFT) has eased rules governing rupee-based export transactions, allowing Indian exporters greater flexibility to invoice overseas sales and receive payments in rupees or foreign currencies, while giving eligible rupee receipts the same treatment as foreign-currency earnings for trade-policy benefits.“..the Foreign Trade Policy (FTP) 2023 has been amended to align the provisions relating to denomination of export contracts and eligibility for FTP benefits in respect of export realisations in India Rupees with the Foreign Exchange Management (manner of receipt and payment) Regulations, 2023,” according the DGFT notification issued on Thursday. Under the revised framework, exports to countries outside the Asian Clearing Union (ACU) can be invoiced in rupees or any foreign currency, with payments also permitted in either currency. More importantly, rupee payments received through approved banking channels for exports to countries other than Nepal and Bhutan will qualify for FTP benefits and count towards fulfilment of export obligations.“Earlier, exporters receiving rupee payments through an RBI-approved banking channel were not always certain whether such receipts would qualify for FTP benefits or count towards their export obligations. The new rules remove this uncertainty by placing eligible rupee receipts on par with foreign-currency earnings,” according to an analysis by research body GTRI.The notification also permits exports financed through EXIM Bank or Government of India lines of credit to be invoiced in rupees.There are separate rules for the ACU, which includes Bangladesh, Bhutan, India, 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. However, invoicing and settlement may also follow directions issued by the Reserve Bank of India.Nepal and Bhutan are treated separately. Export contracts with these two countries must generally be denominated and settled in Indian rupees or according to RBI directions.Iran is covered by the ACU rules, but trade in sensitive goods and technologies must continue to comply with provisions covering specified items linked to nuclear activities.GTRI noted that earlier exporters receiving rupee payments through an RBI-approved banking channel were not always certain whether such receipts would qualify for FTP benefits or count towards their export obligations. The new rules remove this uncertainty by placing eligible rupee receipts on par with foreign-currency earnings.However, the report cautioned that the move does not resolve the commercial difficulties surrounding rupee trade.“Foreign buyers struggle to obtain rupees, while overseas banks may hesitate to hold large rupee balances because the currency is not fully convertible. Trade imbalances may leave some partner countries with unused rupees. Exchange-rate risks, expensive hedging, complex banking procedures and the continued global preference for the US dollar may further limit acceptance of rupee settlement,” it stated.Published on August 20, 2026
