India Announces Trade Settlement in Rupees With Malaysia, gives blow to Dollar Hegemony

India's Ministry of External Affairs (MEA) in a statement announced that tre between India and Malaysia can now be settled in Indian Rupees (INR) in dition to present modalities of a settlement involving or currencies. "This initiative by Reserve Bank of India (RBI) is aimed at facilitating growth of global tre and to support interests of global tring community in Indian Rupees (INR)," as per statement.

It stated that a Special Rupee Vostro Account (SRVA) at Union Bank of India h been "operationalized" by India International Bank of Malaysia (IIBM) in Kuala Lumpur, enabling payment in Indian rupees. In July of last year, Reserve Bank of India (RBI) issued a circular approving opening of "special Vostro" accounts in Indian banks as a means of avoiding dollar tring and ensuing US-led Western sanctions.

$17 billion bi-lateral tre between India and Malaysia

Data from Ministry of Commerce said that New Delhi is Kuala Lumpur's 13th largest tring partner, whose bilateral tre with India reached $17 billion in 2021–22.

Reserve Bank of India (RBI) h authorised banks from 18 countries, including Malaysia, Russia, Germany, Singapore, Sri Lanka, and Tanzania, to operate Vostro accounts. India has never backed up unilateral economic restrictions imposed by several Western countries. Given instability in food and fuel prices around world, New Delhi has increased its commerce with Moscow to unprecedented levels since Western sanctions began last year.

India unveils new Foreign Tre Policy (FTP) for 2023-28

A day prior to announcement on Saturday, New Delhi released its revised Foreign Tre Policy (FTP) for years 2023–28. One of main goals of new tre strategy, according to Indian Commerce Ministry, is to "encourage" internationalisation of rupee. policy also aims to increase Indian exports of goods and services to $2 trillion by 2030.

In case of economic contingencies in or nations, such as liquidity shocks like currency collapse or or economic emergencies, Indian exporters would benefit by boosting commerce in rupees, according to Indian officials.