International Trade Settlement in Indian Rupees (INR)

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....or cross border trade transactions in INR under Foreign Exchange Management Act, 1999 (FEMA) is as delineated below: a. Invoicing: All exports and imports under this arrangement may be denominated and invoiced in Rupee (INR). b. Exchange Rate: Exchange rate between the currencies of the two trading partner countries may be market determined. c. Settlement: The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down in Para 3 of this circular. 3. In terms of Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016, AD banks in India have been permitted to open Rupee Vostro Accounts. Accordingly, for settlement of trade transactions with any country, A....

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...., Indian Banks shall ensure that available funds in these accounts are first used towards payment obligations arising out of already executed export orders / export payments in the pipeline. The said permission would be in accordance with the conditions mentioned in para-C.2 on Receipt of advance against exports under Master Direction on Export of Goods and Services 2016 (as amended from time to time). In order to ensure that the advance is released only as per the instructions of the overseas importer, the Indian bank maintaining the Special Vostro account of its correspondent bank shall, apart from usual due diligence measures, verify the claim of the exporter with the advice received from the correspondent bank before releasing the advan....