India amends Foreign Trade Policy for easier rupee invoicing and payments for exporters
Aug 20, 2026
Synopsis
The government has amended its Foreign Trade Policy to ease rupee invoicing for exporters. Eligible rupee receipts now qualify for export benefits and obligations, aligning with new regulations. This change applies to exports to all countries, with specific rules for ACU members. Rupee settlements may reduce costs and risks for Indian exporters. The amendment aims to support wider international use of the Indian rupee.
The government on Thursday amended the Foreign Trade Policy (FTP) 2023 to make it easier for exporters to invoice overseas sales and receive payments in Indian rupees, bringing eligible rupee receipts on par with foreign-currency earnings for FTP benefits and export obligations.
The changes apply to exports to all countries, with separate provisions for Asian Clearing Union (ACU) member countries, Nepal and Bhutan.
The Directorate General of Foreign Trade (DGFT) said it amended two provisions of the FTP 2023 to align rules on the denomination of export contracts and eligibility for FTP benefits with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.
Exporters can now invoice in rupees
For countries outside the ACU, exporters can now denominate contracts and invoices in any foreign currency or Indian rupees. Earlier, export proceeds generally had to be received in freely convertible foreign currency.
Economic think tank GTRI said eligible rupee payments for exports to countries other than Nepal and Bhutan will now qualify for FTP benefits and count towards fulfilment of export obligations.
Rupee payments received through approved banking channels will be treated on par with export payments received in foreign currency, GTRI said. Exports financed through EXIM Bank or Government of India lines of credit can also be invoiced in rupees.
The ACU is a regional payment arrangement established in 1974 to facilitate trade settlements and reduce repeated transfers of foreign exchange by periodically settling the net obligations of its members.
It has nine members including Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka, represented by their central banks or monetary authorities.
Rules differ for ACU countries
For exports to Bangladesh, Iran, Maldives, Myanmar, Pakistan and Sri Lanka, contracts must use a currency determined by the ACU, according to the notification.
However, invoicing and settlement may also follow directions issued by the Reserve Bank of India.
"Nepal and Bhutan are treated separately. Export contracts with these two countries must generally be denominated and settled in Indian rupees or according to RBI directions," GTRI Founder Ajay Srivastava said.
Iran is covered by the ACU rules, but trade in sensitive goods and technologies must continue to comply with paragraph 2.19 of the FTP, Srivastava said.
"This provision covers specified items linked to nuclear activities and nuclear-weapon delivery systems and reflects India's obligations under UN Security Council Resolution 2231 and relevant International Atomic Energy Agency rules," he said.
Rupee payments to get FTP benefits
The amendment aligns the FTP with RBI's foreign exchange regulations issued in 2023, which already allow wider use of the rupee in international payments.
Earlier, exporters receiving rupee payments through an RBI-approved banking channel were not always certain whether such receipts would qualify for FTP benefits or count towards their export obligations.
The new rules remove this uncertainty by placing eligible rupee receipts on par with foreign-currency earnings, Srivastava said.
Rupee settlement may help Indian exporters reduce currency-conversion costs and exchange-rate risks. It could be particularly useful in trade with countries facing dollar shortages or difficulty accessing established international payment systems, he said.
The change may also support wider international use of the rupee by giving Indian exporters and overseas buyers an alternative to settling every transaction in US dollars or another freely convertible currency, Srivastava added.
Welcoming the notification, he said the amendment removes uncertainty and places eligible rupee export receipts on par with foreign-currency earnings.
“But regulatory permission alone will not create large-scale rupee trade. Foreign buyers must be able to obtain rupees easily, while overseas banks need practical options to use, invest, convert or repatriate their balances,” he said.
He added that India now needs country-specific settlement arrangements, simpler banking procedures, affordable hedging, rupee-based export credit and ECGC protection.
Without this supporting system, rupee invoicing may remain a useful facility rather than becoming a widely used trade option, he said.
[The Economic Times]
