India set to reduce use of US dollar in cross-border trade

India’s central government has unveiled its new Foreign Trade Policy, which is expected to facilitate greater trade, boost manufacturing, help to shift away from the US dollar, and make the rupee a global currency.

The FTP 2023, revealed on Friday by Indian Commerce and Industry Minister Piyush Goyal, comes into effect on April 1.

Rupee trade was made the centerpiece of the new plan as part of New Delhi’s broader policy aimed at securing a global status for the currency and allowing it to be used for international trade settlement.

Indian policymakers have recently taken several steps towards shifting away from the greenback to rubles and rupees in mutual trade with sanctions-hit Russia. The nation agreed to switch to a rupee payment mechanism for Iranian crude imports. Malaysia is the latest nation to agree to settle trade with India using the rupee.

Under the new policy, India is also planning to raise the country’s outward shipments to $2 trillion by 2030. The plan includes a wide range of steps like expanding the FTP benefits to ecommerce exports and doubling the value limit for exports through courier.

The FTP 2023 also proposes to create a designated zone with a warehousing facility to help e-commerce aggregators towards easy stocking, customs clearance and returns processing.

India’s trade has been hit over in recent years due to Сovid-related disruptions to supply chains and a slowdown in global trade amid ongoing geopolitical tensions.

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