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The country will use the G20 platform to further push the cross border trade settlement in rupee with the member countries, Commerce Secretary Sunil Barthwal said on Monday.
He said the focus will be on those countries that are facing problems with a particular currency or a basket of currencies, and are looking to come out of that crisis.
“We are interested in improving the trade with respect to the currencies of the countries that are trading (with India). Definitely, we would like to see that rupee trade also happens, particularly with those countries which are facing (currency) issues,” Barthwal said while answering a question on whether India will use the G20 platform to boost rupee trades.
He was addressing the media on the eve of the first Trade and Investment Working Group (TIWG) under India’s G20 Presidency, to be held in Mumbai from March 28 to 30.
India is holding the G20 Presidency from December 1, 2022 to November 30, 2023.
Last year in July, the Reserve Bank of India (RBI) had put in place a mechanism to settle international trade in rupees to promote growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in the rupee. On March 14, Minister of State for Finance Bhagwat Karad informed Rajya Sabha that the Reserve Bank of India (RBI) has given approvals to domestic and foreign AD (Authorised Dealer) banks in 60 cases for opening of Special Rupee Vostro Accounts (SRVAs) of correspondent banks from 18 countries.
The countries include Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, and the United Kingdom.
A Vostro account is an account a correspondent bank holds on behalf of another bank.
During the three-day TIWG meeting, over 100 delegates from G20 member countries, invitee countries, regional groupings and international organizations will engage in deliberations to accelerate global trade and investments.
Trade finance supports economic growth, and it is integral for maintaining international trade flows, for mitigating risks emerging from tight liquidity. Around 80 per cent of all international trade uses some type of trade finance instrument, such as letter of credit, supply chain financing, invoice discounting and receivables financing.
Global trade finance involves a number of parties, including banks, trade finance companies, export credit agencies, insurers, importers and exporters. Trade finance is the lifeblood of cross-border trade.
The Group of Twenty (G20) comprises 19 countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom and United States and the European Union.
The G20 members represent around 85 per cent of the global GDP, over 75 per cent of the global trade, and about two-thirds of the world population.