Latest SSC jobs   »   Current Affairs   »   Government approves the use of rupees...

Government approves the use of rupees in export promotion schemes

Export promotion scheme: The Government of India has modified its Foreign Trade Policy, to enable rupee settlement of the global commerce for export development initiatives. The announcement was made by the Commerce Ministry on November 9, 2022. According to a statement from the Commerce Ministry, given the growing interest in the internalization of the Indian Rupee, the aforementioned regulatory changes have been made to make it easier to conduct international trade in Indian Rupees.

Export promotion scheme: Key Points

● The decision to permit settlement of commerce in Indian rupees was made in response to mounting pressure on the rupee in India following Russia’s invasion of Ukraine in late February.
● Settlement in rupees for export promotion schemes: Imports for exports, export performance for recognition as Status Holders, realization of export proceeds under the advance authorization and Duty-Free import Authorization schemes, and realization of export proceeds under the Export Promotion of Capital Goods Scheme have all received notifications of the changes.
● Due to the modifications, export payments made in Indian rupees will now be eligible for benefits, incentives, and the fulfilment of export commitments under the Foreign Trade Policy.

Export promotion scheme: What is the rationale behind allowing trade in Indian rupees?

The latest proposal by the Indian government to permit the settlement of commerce in rupees comes amid mounting pressure on the rupee following Russia’s invasion of Ukraine.
Days after the Reserve Bank of India (RBI) implemented the method, on July 19, 2022, the rupee first crossed the 80 to the dollar threshold. Since then, the rupee has also lost more value and has even crossed the 83-per-dollar threshold.

Export promotion scheme: What is the Mechanism for Rupee-based Global Trade Settlement?

● The Indian Central Bank announced the establishment of a mechanism to settle international trade in rupees.
● Under this system, all exports and imports may be valued in rupees and invoiced in that currency, with the market determining the exchange rate between the currencies of the two trading partners.
● The Special Rupee Vostro Accounts of Correspondent Banks of the Partner Trading Country must be opened by the authorized Indian banks in order to settle these transactions.

Export promotion scheme: Foreign Trade Policy

  • The Government of India’s Foreign Trade Policy is a framework of strategy or a collection of directives designed to encourage foreign trade while promoting the export of goods and services from India. The Policy is announced by the Ministry of Commerce and Industry for a term of five years, revised on the last day of March each year, and takes effect on the first day of April.
  • New Foreign Trade Policy: The meeting was conducted on January 12, 2021, and the topic was “New Foreign Trade Strategy for the year 2021-26.” According to the committee, the main goal of the policy would be to position India as a leader in global trade within the next five years.

  • The Ministry of Commerce and Industry was briefed on a few of the following proposals for the new policy at the discussion with the committee, and the government appears committed to making considerable progress toward realizing its $5 trillion dream.

  • The Hon. Prime Minister of India, Narendra Modi, has the goal of growing the Indian economy to $5 trillion by 2025. He has urged citizens to “Be Local and Go Global” and to “Voice for Local.”
  • India must quadruple its exports to $1 trillion by 2025 and have GDP growth of at least 8% in the next years in order to realize its aspirations. The advisory panel has recommended changes to labour regulations, lower capital costs, choosing the correct trading partner, sector-specific export promotion strategies, etc.
  • Implementation of District Export Hubs – The new policy’s “District Export hub initiative,” which aims to assist small businesses and farmers by presenting export opportunities through eCommerce and digital marketing platforms, will play a significant role in the implementation of District Export Hubs.
  • GI (geographical indications) product mapping: The sector has long demanded that India’s international trade processes be balanced; discussions have been held to loosen restrictions on the global market with relation to FTP policy and procedure, minimize transaction costs, and improve the convenience of doing business.

 

You may also like to read:

Download your free content now!

Congratulations!

Government approves the use of rupees in export promotion schemes_60.1

General Awareness & Science Capsule PDF

Download your free content now!

We have already received your details!

Government approves the use of rupees in export promotion schemes_70.1

Please click download to receive Adda247's premium content on your email ID

Incorrect details? Fill the form again here

General Awareness & Science Capsule PDF

Thank You, Your details have been submitted we will get back to you.