Trading in Indian rupees rather than the dollar or euro as has been traditionally done for decades is likely to encourage trade and promote economic growth and development between India and South Africa, a prominent business leader has said.
Praveer Tripathi, the president of the Confederation of Indian Industry-India Business Forum (CII-IBF) in South Africa, made the remarks in his keynote address at the KwaZulu Natal International Business Association (KIBA) Gala Dinner hosted in Durban on Saturday.
“International trade settlement in Indian rupees, if implemented, will enable a trader in South Africa to import goods by paying in Indian rupees. Settling of trade in Indian rupees will not only eliminate the need for a third currency, such as the US dollar or Euro – it will result in lower transaction cost and reduce currency exchange risks,” Tripathi said.
He said it will also create new avenues for investment and trade between the two countries and it will promote the use of local currencies which will benefit both countries’ economies.
Tripathi said settling trade in Indian rupees would also create new opportunities for businesses in South Africa and India to enter each other’s markets. This would encourage more bilateral trade and investment and promote economic growth and development in both countries.
“Settling trade in Indian rupees would strengthen the ties between India and South Africa and promote long-term trade relationships. By promoting trade settlement in their respective currencies, both countries can demonstrate their commitment to fostering economic cooperation and partnerships,” Tripathi said.
“The IBF in South Africa recognises the potential of direct trade in rupees between our two countries and is committed to exploring this avenue,” Tripathi said as he called on KIBA to work with his organisation to promote direct trade between their two countries, especially for the benefits that it could bring to the small and medium business sectors.
“There are 18 countries, including some African countries, that have already agreed to transact in Indian rupees, so with your help, we want to get this started in South Africa – the sooner the better,” Tripathi concluded.
At the event, a Memorandum of Understanding (M0U) was also signed between KIBA and the Delhi-based Progress, Harmony and Development Chamber of Commerce and Industry.
KIBA President Omie Singh described the signing of the M0U as historic since the 118-year-old organisation has not had a footprint in South Africa until now.
“This MoU will open the door to 160 other organisations throughout the world, be it in Germany, London, China, Russia, or Brazil. KIBA will have access to do business with all those organisations throughout the world,” Singh said, adding that this would benefit not only the province but South Africa as a whole.