Overview
- The Directorate General of Foreign Trade amended the Foreign Trade Policy on Thursday, Aug 20, 2026, to permit exporters to invoice and receive payments in Indian rupees for contracts with countries outside the Asian Clearing Union.
- Under the amendment, eligible rupee export receipts routed through authorised banks will be treated the same as earnings in freely convertible currencies for FTP benefits and can be counted toward exporters' obligations.
- Transactions with Asian Clearing Union members remain subject to ACU currency rules and exports to Nepal and Bhutan follow separate RBI directions, while trade in sensitive items must still meet FTP paragraph 2.19 and international non‑proliferation obligations.
- Analysts say the rule change removes a legal hurdle but widespread adoption will require practical fixes such as easier access to rupees for foreign buyers, overseas banks willing to hold rupee balances, affordable hedging products, and rupee-based export credit and insurance.
- The move aligns the FTP with the Reserve Bank of India’s 2023 foreign‑exchange regulations and builds on limited rupee settlement steps from 2022, offering India a tool to ease trade with dollar‑short partners and potentially lower convertible‑currency outflows.