The Government of India is in talks with some smaller countries as it is trying to expand bilateral trade through bespoke rupee accounts. Along with this, it is also reportedly trying to internationalise indigenous payment methods.
According to a report by the Economic Times, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades.
People familiar with the matter told the publication that the countries included African countries such as Zimbabwe, Djibouti, Ethiopia, Malawi, Sudan and Ethiopia. As per the report, the National Payments Corporation of India (NPCI), the Reserve Bank of India (RBI), and the finance ministry also did not comment on the matter.
Following the agreement on strategic partnerships between nations, the RBI and NPCI will reportedly be involved in resolving the exchange rate and payment problems.
"We are engaging with a group of smaller countries which may be interested in bilateral trades via dedicated rupee account," the Economic Times quoted Asif Iqbal, President, IETO as saying.
The nation's flagship payment system, the Unified Payments Interface (UPI), created by NPCI, have gained recognition from all around the world. The Indian authorities are now also pushing the Rupay for more global acceptance.
The publication further quoted Asif Iqbal, "We are helping to kickstart bilateral talks after which we will make a pitch for the UPI payment system involving NPCI. Such baby steps will help the rupee gain international clout gradually through non-dollar bilateral trades," as saying
The country’s trade with Djibouti, Namibia, Ethiopia, Kenya and Cuba can be settled in Indian rupees against franc, Namibian dollars, birrs, shillings and pesos respectively.
Sudan may directly settle payments in rupees against its own currency. While Bangladesh's cash settlement process is proceeding rapidly, Sri Lanka's cash settlement procedure is most likely moving slowly due to the unrest there.
