Business EconomyPosted at: Oct 16 2026 6:05PM


India pushes Rupee trade settlements to help countries facing forex shortages: Sitharaman

New Delhi, Oct 16 (UNI) India is working to expand trade settlements in rupees and local currencies to help partner countries facing shortages of foreign exchange continue importing essential goods, Finance Minister Nirmala Sitharaman said on Friday.
Speaking at an interaction with the Atlantic Council on the sidelines of the IMF-World Bank annual meetings in Bangkok, Thailand, Sitharaman said the mechanism could help sustain trade with countries that struggle to access hard currencies despite their import requirements.
She said India wanted payments for goods exported to such countries to be settled in rupees, enabling it to maintain trade flows without facing the same level of pressure on their foreign exchange reserves.
Sitharaman said the initiative was aimed at facilitating local currency settlements and ensuring that foreign exchange constraints did not disrupt trade. She added that India was working towards making the mechanism more effective.
The Finance Minister also highlighted the broader economic challenges facing several countries amid rising geopolitical tensions, conflicts and economic downturns. These developments, she said, had pushed some nations into debt distress and balance of payments crises.
She noted that multilateral development institutions had historically taken three to four years to respond to such challenges, although efforts were now underway to address these delays.
Separately, Sitharaman said India was pursuing stronger bilateral partnerships while making progress on several trade agreements. However, she raised concerns over the existing trade arrangement between India and the Association of Southeast Asian Nations (ASEAN), describing it as unfavourable to New Delhi.
She said India was not opposed to ASEAN member countries benefiting from the agreement but wanted to address concerns raised by Indian importers and domestic manufacturers.
According to Sitharaman, the two sides are reviewing the agreement, with India seeking to continue the arrangement in a revised form that better addresses its trade concerns.
The review is aimed at ensuring that the agreement delivers more balanced outcomes for both sides, particularly in terms of market access and the impact of imports on Indian manufacturers.
Sitharaman also reiterated India's decision to stay out of the Regional Comprehensive Economic Partnership (RCEP), a major trade agreement involving economies across Asia and the Pacific.
She said the agreement did not offer sufficient benefits to India, making participation unfavourable to the country's interests.
India continues to trade with countries that are members of the RCEP bloc, but joining the agreement would not necessarily improve its position, she said.
India's approach reflects its focus on securing trade arrangements that offer reciprocal benefits while protecting the interests of domestic businesses and manufacturers.
The Finance Minister's remarks underline India's twin priorities of strengthening international trade partnerships and exploring alternative payment mechanisms to support trade with countries facing foreign exchange shortages.
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