The Directorate General of Foreign Trade (DGFT) on Wednesday notified norms to allow exporters to avail incentives under the foreign trade policy, even on realisation in rupees. The DGFT, under the commerce ministry, has already allowed invoicing, payment and settlement of exports and imports in Indian rupee, a move aimed at facilitating trade in the domestic currency.
In July, the Reserve Bank of India (RBI) had asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of increasing interest of the global trading community in the domestic currency.
“The Government of India has made suitable amendments in the Foreign Trade Policy and Handbook of Procedures to allow for International Trade Settlement in Indian Rupees (INR) i.e., invoicing, payment, and settlement of exports/imports in Indian Rupees. Accordingly, the Directorate General of Foreign Trade (DGFT) had earlier introduced Para 2.52(d) vide Notification No. 33/2015-20 dated 16.09.2022 to permit invoicing, payment and settlements exports and imports in INR in sync with RBI’s A.P. (DIR Series) Circular No.10 dated11th July 2022,” the DGFT notification said.
“The updated provisions for export realisation in Indian rupees have been notified for imports, for exports, export performance for recognition as status holders, realisation of export proceeds under Advance Authorisation (AA) and Duty Free Import Authorisation (DFIA) schemes and realisation of export proceeds under Export Promotion Capital Goods (EPCG) scheme,” it added.
The notification said that changes have been introduced in the Foreign Trade Policy (FTP) for grant of export benefits, incentives, fulfilment of export obligation, and for export realisations in Indian rupees as per the RBI guidelines released in July.
“Accordingly benefits/incentives/fulfilment of export obligation under the Foreign Trade Policy has been extended for realisations in Indian rupees as per the RBI guidelines dated July 11, 2022,” it said.
Given the rise in interest in the internationalisation of the Indian rupee, it said, this decision would facilitate and bring ease in international trade transactions in rupees.
On Wednesday, the rupee appreciated by 45 paise to close at 81.47 (provisional) against the US dollar amid fall in crude oil prices, dollar weakness and sustained foreign fund inflows. At the interbank foreign exchange market, the local unit opened at 81.43, and witnessed an intra-day high of Rs 81.23 and low of Rs 81.62 during the session.
The local unit finally settled at 81.47 against the American currency, registering a rise of 45 paise over its previous close.
India’s overall exports during April-September 2022-23 rose by 15.54 per cent to $229.05 billion. The imports during the period increased by 37.89 per cent to $378.53 billion. The trade deficit during the first six months of the fiscal has widened to $149.47 billion as against $76.25 billion during April-September 2021-22.
(With Inputs From PTI)
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