In a significant move towards strengthening economic ties, the Ministry of External Affairs has declared that trade between India and Malaysia can now be conducted using the Indian Rupee (INR) as a settlement currency, in addition to other currencies. This progressive step follows the recent unveiling of the Foreign Trade Policy (FTP) 2023 by the Ministry of Commerce, underscoring the government’s determination to establish the Indian rupee as a global currency.
The decision to allow Indian Rupee settlements in bilateral trade with Malaysia is expected to yield substantial benefits for both countries. By broadening the currency options, it will facilitate smoother and more efficient trade transactions, reducing the costs associated with currency conversion and foreign exchange fluctuations. The move aligns with the Indian government’s broader strategy of promoting the rupee’s prominence in international trade and finance.
The use of INR as a settlement currency is poised to boost bilateral trade between India and Malaysia by providing greater flexibility and convenience to businesses engaged in cross-border transactions. It will simplify financial processes, enhance transparency, and foster closer economic cooperation between the two nations. Additionally, this measure is likely to strengthen the economic partnership and encourage more robust trade flows, benefiting various sectors such as manufacturing, services, and investment.
Furthermore, the inclusion of the Indian Rupee as a settlement option signifies growing confidence in the stability and strength of the currency, underscoring India’s economic prowess on the global stage. As India continues to establish itself as an attractive destination for trade and investment, the utilization of the rupee in international transactions reinforces its standing as a reliable and widely accepted currency.
The Ministry of External Affairs’ announcement reflects the government’s commitment to fostering an enabling trade environment, promoting economic growth, and expanding India’s role in global trade. By embracing the Indian Rupee as a settlement currency, the bilateral trade relationship between India and Malaysia is poised for further development, opening up new avenues for collaboration, and creating a solid foundation for future trade partnerships in the region and beyond.