In what has been seen over the past years, India has been taking over the world stage in every way possible. Be it during the Covid times, the External Minister’s representation of India in the global media, the leadership of PM Narendra Modi, Indian value systems and spirituality—the world is slowly starting to turn heads towards us and away from the West hangover.
It is said that luck is not always a coincidence, but an ability to tap out the opportunities that exist in and around us. The right move at the right time, probably, has been the secret that the present government has time and again used to further India’s growth at an exponential rate. Recently, yet another move by the government has created history leaving every single Indian within and outside India feeling that sense of pride. The Indian National Rupee went global!
In a historic move, the Reserve Bank of India (RBI) gave a nod to allow 18 countries to now use Indian Rupee. The Union Minister of State for Finance, Bhagwat Kishanrao Karad, smiled when he informed the Indian Parliament that 60 approvals have been given so far to start a Special Vastro Rupee Account (SVRA). This was made possible through a tie-up of the Indian Banks with 30 banks from other countries, thus forming 30 Indian accounts globally. The Russian banks were the first to receive a go through followed by Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom.
This move means that Indian rupee will now be accepted in these countries. It is a dream that many have been dreaming of. Just imagining the possibility of paying at a restaurant in the UK with the Indian rupee is a moment of utter pride and excitement for any Indian. But this move was no sudden experiment.
The move is a well-utilised opportunity that the Indian government has grabbed against the backdrop of commodity crises in the global market. The flow of trade between countries has a drastic clog in the aftermath of Covid, the Ukraine crisis and the destabilised dollar. Recently, the BRICS countries openly stated their intention to de-dollarize the global economy. This was followed by an ongoing urge by various economists and countries to use local currency in global trade. This is in an attempt to avoid the risk of fluctuating exchange rates due to the tip-off of balance in the global economies. It is also a concern raised by many countries facing international sanctions and the countries that trade with them, as they hamper supply chains and the free flow of trade globally.
More countries coming forward to accept the INR means that these countries are finding India an important trade partner. The foundation for this move was laid last year when the RBI and the Finance Ministry asked the top banks of India to push import and export transactions in INR. In an attempt to not terminate their trade with India and in line with the ongoing intention to de-dollarize and increase the usage of local currency, the countries came forward to accept the INR. This currency will be used by the countries to invest in India and Indian companies. They will also be used to buy goods and services and will make a big difference in reducing transaction costs and boosting trade.
For India, it is an extremely beneficial move as we can now directly and freely trade with countries without the worry of exchange rates. This will also reduce the trade deficit that India currently has. It will boost export to India and will be a big step toward India becoming an exporter rather than an importer. The move will also go a long way in boosting trade with South-Asian countries.
The Indian government has been setting the stage for India to go global and this move will go a long way in its attempt. A few years ago, one may have not imagined the possibility of taking the Indian rupee and transacting with it in countries outside India. Even a year ago every Indian had to convert INR to dollars to buy even a coffee. Today, we can make the same transaction using the Indian rupee. It is a moment of pride for India and for everyone who puts India First.