India pushes rupee settlements to aid forex-starved developing nations

India is actively promoting trade settlements denominated in rupees to assist developing nations facing acute hard currency constraints, Finance Minister Nirmala Sitharaman said on Friday. Speaking at the Atlantic Council during the IMF-World Bank annual meetings in Bangkok, Sitharaman stressed that rupee-based payments could enable forex-starved countries to continue importing critical goods without depleting their limited dollar reserves.

"One of the things that we in India want to do is to settle in rupee, whatever the payment is got to be done by those countries which import goods from us," Sitharaman said. She emphasized that local currency settlements represent a practical solution for nations struggling to access sufficient hard currencies while maintaining vital trade relationships.

India is working to facilitate both rupee and local currency settlements with trading partners facing foreign exchange constraints. The initiative aims to ensure trade continuity and provide economic relief to countries wrestling with currency shortages, particularly as global economic pressures persist. By enabling settlements in rupees rather than hard currencies, India seeks to support partner nations in accessing essential imports while reducing strain on their foreign exchange reserves.