A new incentive proposes for exporters. India may provide incentives to exporters settling trades using rupees to increase the acceptability of the currency and expand the sales of goods to Russia, which has dropped because of western sanctions, according to government and industry citations.
The move is designed to promote Russian trade after the Reserve Bank of India (RBI) put in place a mechanism for international trade settlements utilizing the rupee last month. Indian firms are already swapping out the dollar and euro for Asian currencies to settle trades to avoid Western sanctions imposed on Russia after they invade Ukraine.
The most reasonable incentive that will be presented would apply a current program for trades utilizing fully convertible currencies such as the dollar and the euro to the rupee, which is only partly convertible, according to the three sources.
Under the existing program, Indian exporters acquire rebates on a portion of the taxes and customs duties accumulated during the entire process of manufacturing a good. The latest incentive would apply those rebates to goods exported using the rupee as a currency, the sources expressed.
Further, the government official stated that India is striving to add trade worth $6 billion to $7 billion with Russia in the next two months. India's imports from Russia, mainly crude oil, raised five times to more than $15 billion from Feb. 24, when Russia invaded Ukraine, and the end of July, compared to the previous year, Reuters reported earlier this month.
However, exports dropped to $852.22 million from $1.34 billion in the same duration.