The government has amended the Foreign Trade Policy to allow exporters greater flexibility to invoice overseas sales and receive payments in Indian rupees, while aligning the rules with RBI regulations.
The government on Thursday amended certain provisions of the Foreign Trade Policy to make it easier for exporters to invoice overseas sales and receive payments in Indian rupees.
The amendments cover exports to all countries, although the rules vary by destination.
Two paragraphs of the Foreign Trade Policy (FTP) 2023 have been amended “to align the provisions relating to denomination of export contracts and eligibility for FTP benefits in respect of export realisation in Indian Rupees with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2023”, the Directorate General of Foreign Trade (DGFT) said in a notification.
For countries outside the Asian Clearing Union (ACU), export contracts and invoices may now be denominated in any foreign currency or Indian rupees.
Earlier, export earnings generally had to be received in a freely convertible currency.
Rupee payments to qualify for FTP benefits
Commenting on the notification, economic think tank GTRI said eligible rupee payments for exports to any country other than Nepal and Bhutan will now qualify for FTP benefits and count towards fulfilment of export obligations.
Rupee earnings received through approved banking channels will therefore be treated on par with export payments received in foreign currency, it said, adding that exports financed through EXIM Bank or Government of India lines of credit may also be invoiced in Indian rupees.
The ACU is a regional payment arrangement established in 1974 to facilitate trade settlements and reduce repeated transfers of foreign exchange by periodically settling the net obligations of its members.
It has nine members – Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka – represented by their central banks or monetary authorities.
Different rules for ACU countries
For exports to Bangladesh, Iran, Maldives, Myanmar, Pakistan and Sri Lanka, contracts must use a currency determined by the ACU, according to the notification.
However, invoicing and settlement may also follow directions issued by the Reserve Bank of India.
“Nepal and Bhutan are treated separately. Export contracts with these two countries must generally be denominated and settled in Indian rupees or according to RBI directions,” GTRI Founder Ajay Srivastava said.
He said that Iran is covered by the ACU rules, but trade in sensitive goods and technologies must continue to comply with paragraph 2.19 of the FTP.
“This provision covers specified items linked to nuclear activities and nuclear-weapon delivery systems and reflects India’s obligations under UN Security Council Resolution 2231 and relevant International Atomic Energy Agency rules,” he said.
Aligning FTP with RBI rules
The amendment aligns the Foreign Trade Policy with RBI’s Foreign Exchange Management regulations issued in 2023, which already allow wider use of the rupee in international payments.
Earlier, exporters receiving rupee payments through an RBI-approved banking channel were not always certain whether such receipts would qualify for FTP benefits or count towards their export obligations.
The new rules remove this uncertainty by placing eligible rupee receipts on par with foreign-currency earnings, he said.
Potential benefits for exporters
Rupee settlement may reduce currency-conversion costs and exchange-rate risks for Indian exporters. It could be particularly useful in trade with countries facing dollar shortages or difficulty accessing established international payment systems, he said.
The change may also support wider international use of the rupee by giving Indian exporters and overseas buyers an alternative to settling every transaction in US dollars or another freely convertible currency, Srivastava added.
Welcoming the notification, he said it removes uncertainty and places eligible rupee export receipts on par with foreign-currency earnings.
“But regulatory permission alone will not create large-scale rupee trade.
Foreign buyers must be able to obtain rupees easily, while overseas banks need practical options to use, invest, convert or repatriate their balances,” he said.
He added that India now needs country-specific settlement arrangements, simpler banking procedures, affordable hedging, rupee-based export credit and ECGC protection.
Without this supporting system, rupee invoicing may remain a useful facility rather than becoming a widely used trade option, he said.
Published on August 20, 2026
