Trade settlement with Bangladesh in rupee will boost bilateral commerce: Confederation of Indian Industry

Bangladesh and India commencing cross-border trade settlement in Indian rupee (INR) would promote two-way commerce by reducing transaction cost, the Confederation of Indian Industry (CII) said on Sunday (6 August).

"Since all exports and imports and settlement of trade transactions under this arrangement may be denominated and invoiced in INR, this would also reduce dependence on the US Dollar and would address situations like scarcity of forex reserves apart from strengthening regional currency and trade," said CII National Committee on Exports and Imports Chairman Sanjay Budhia, reports the Economic Times. 

"This would certainly promote the growth of trade between the nations and support the increasing interest of the global trading community in INR," Budhia added.

Due to this arrangement, the transaction costs during trade between the countries will reduce which will boost the Indian exports to Bangladesh, he further said.

In July this year, Bangladesh and India launched trade transactions in rupees with the aim of reducing dependence on the US dollar and strengthening regional currency and trade. This is the first time Bangladesh has done bilateral trade with a foreign country in addition to the US dollar.

"This will go a long way in further enhancing the already significant economic relations between India and Bangladesh through economically efficient cross-border transactions," Budhia said.

"Industry could look at taking business delegations to Bangladesh to better explore the market. The large enterprises could also provide handholding services to smaller entrepreneurs in their journey towards export excellence," he added.

According to the official data, exports from Bangladesh to India amount to USD 2 billion, while Bangladesh's imports from India are worth USD 13.69 billion.