Indian exporters can now invoice overseas buyers and receive eligible export payments in Indian rupees more easily after the Directorate General of Foreign Trade (DGFT) amended the Foreign Trade Policy 2023.
The change places eligible export proceeds received in INR on a similar footing to foreign-currency earnings for Foreign Trade Policy benefits and the fulfilment of export obligations. It is intended to remove a regulatory concern that may have discouraged exporters from choosing rupee-based settlement.
The amendment was issued through DGFT Notification No. 30/2026-27 dated August 20, 2026, covering changes to paragraphs 2.52 and 2.53 of the Foreign Trade Policy.
At a Glance
- Export contracts for eligible non-ACU markets can be denominated in INR or foreign currency.
- Export invoices can be raised in Indian rupees.
- Payments may be received in INR through approved banking channels.
- Eligible rupee receipts can qualify for Foreign Trade Policy benefits.
- INR receipts can count towards the fulfilment of applicable export obligations.
- Exports supported by EXIM Bank or Government of India lines of credit can be invoiced in INR.
- Separate rules continue to apply to ACU member countries, Nepal and Bhutan.
- Exporters must continue to follow RBI, banking, documentation and reporting requirements.
What Has Changed in India’s Rupee Export Settlement Rules?
Under the revised policy, exporters dealing with countries outside the Asian Clearing Union can denominate their contracts and invoices in either Indian rupees or foreign currency.
The export payment may also be received in INR or an eligible foreign currency, subject to the applicable banking and regulatory requirements.
The most important change concerns the treatment of export earnings received in rupees. Eligible INR realisations through approved banking channels can now be considered for:
- Benefits available under the Foreign Trade Policy
- Fulfilment of export obligations under applicable export schemes
- Treatment comparable to qualifying foreign-currency export proceeds
This provides greater policy certainty to exporters and reduces the possibility of losing eligible trade benefits simply because an overseas transaction was settled in rupees.
Previous Rules Compared With the Revised Framework
Area
Earlier position
Revised position
Export contract
INR invoicing was possible, but rupee realisation was allowed only under specified conditions
Eligible contracts can be denominated in INR or foreign currency
Export invoice
Could be raised in INR in permitted cases
INR invoicing is clearly recognised for eligible exports
Export payment
Export proceeds were generally expected in freely convertible currency, with limited INR exceptions
Eligible payments can be received in INR or foreign currency
FTP benefits
Uncertainty existed over the treatment of some rupee receipts
Eligible INR receipts can qualify for FTP benefits
Export obligations
Treatment of rupee realisations could discourage INR settlement
Eligible INR receipts can count towards export-obligation fulfilment
Government-supported exports
Specific provisions applied
EXIM Bank and Government of India line-of-credit exports may be invoiced in INR
ACU markets
Separate settlement rules applied
Separate ACU provisions continue
How Can Exporters Receive International Payments in INR?
India’s rupee-settlement framework allows eligible international trade transactions to be processed through Special Rupee Vostro Accounts, commonly known as SRVAs.
An authorised dealer bank in India can maintain an SRVA for the correspondent bank of a trading-partner country. Under this mechanism, an Indian exporter receives payment in rupees from the balance held in the designated account.
The Reserve Bank of India introduced this trade-settlement mechanism in July 2022. It allows eligible exports and imports to be invoiced, paid for and settled in INR.
INR Export Settlement Process
The exact banking arrangement can vary by country and transaction. Exporters should therefore confirm the payment structure with their authorised dealer bank before finalising a rupee-denominated contract.
Why Does the DGFT Amendment Matter to Exporters?
More choice when negotiating payment terms
Exporters and overseas buyers can consider INR alongside conventional foreign currencies when structuring eligible transactions.
Greater certainty over export benefits
Eligible rupee receipts can receive Foreign Trade Policy treatment comparable to qualifying foreign-currency realisations. This removes an important policy concern for businesses considering INR settlement.
Potential reduction in currency risk
When an Indian exporter invoices and receives payment in rupees, exposure to exchange-rate movements may be reduced. The actual benefit will depend on the contract, pricing structure, settlement arrangement and currency exposure of both parties.
The RBI states that settling transactions in INR can help reduce exchange-rate risk for Indian exporters and importers.
Support for markets with foreign-currency constraints
Rupee settlement may provide another payment option when buyers face limited access to widely used settlement currencies. However, adoption will depend on overseas demand for INR, participating banks and the availability of rupee balances.
Easier participation in supported overseas projects
Allowing INR invoicing for exports backed by EXIM Bank or Government of India lines of credit could help businesses participating in government-supported trade and infrastructure projects.
Which Transactions Have Separate Rules?
The revised framework does not mean that identical rules apply to every export destination.
Countries participating in the Asian Clearing Union remain subject to the settlement arrangements prescribed for ACU transactions. Nepal and Bhutan also have separate provisions governing trade payments.
Transactions involving Iran must continue to follow restrictions covering sensitive goods and technologies, including applicable controls under India’s SCOMET framework.
Exporters should verify the relevant country, product, banking and compliance requirements before agreeing to receive payment in INR.
Will the New Rules Increase International Use of the Rupee?
The amendment supports India’s longer-term effort to increase the use of the rupee in cross-border trade. It aligns the Foreign Trade Policy more closely with the RBI’s existing INR settlement mechanism.
However, regulatory approval alone may not produce an immediate rise in rupee-denominated exports. Wider adoption will also depend on:
- Overseas buyers’ willingness and ability to obtain rupees
- Availability of participating banks and SRVA arrangements
- Options for overseas institutions to use accumulated INR balances
- Conversion and repatriation arrangements
- Hedging costs and access to trade finance
- The balance of trade between India and individual partner countries
The amendment removes an important policy obstacle, but commercial acceptance and banking infrastructure will determine how widely INR settlement is used.
What Should Exporters Do Before Choosing INR Settlement?
Exporters considering rupee-based payment should:
- Confirm whether the destination and transaction are eligible.
- Consult an authorised dealer bank about the applicable settlement channel.
- Verify whether an appropriate SRVA or another approved arrangement is available.
- State the currency, exchange-rate mechanism and payment terms clearly in the contract.
- Confirm how the receipt will be reported and documented.
- Check whether it qualifies for the intended FTP benefit or export obligation.
- Review sanctions, SCOMET and product-specific requirements.
- Compare the costs and risks of INR settlement with foreign-currency settlement.
Frequently Asked Questions
Can Indian exporters now invoice foreign buyers in rupees?
Yes. Eligible export contracts and invoices can be denominated in Indian rupees, subject to the Foreign Trade Policy, RBI rules and applicable banking requirements.
Can export payments be received in INR?
Yes. Eligible export payments may be received in INR through approved banking channels, including applicable rupee-based settlement arrangements.
Will INR export proceeds qualify for Foreign Trade Policy benefits?
Eligible rupee export realisations can qualify for Foreign Trade Policy benefits when they meet the prescribed conditions.
Can INR receipts count towards export obligations?
Yes. Qualifying export proceeds received in rupees can be considered for fulfilment of applicable export obligations.
What is a Special Rupee Vostro Account?
An SRVA is an INR-denominated account maintained by an authorised dealer bank in India for an overseas correspondent bank. It can be used to settle eligible international trade transactions in rupees.
Does the revised rule apply to ACU countries?
Different settlement provisions continue to apply to Asian Clearing Union members. Exporters should confirm the relevant requirements with their authorised dealer bank.
Can exports funded through an EXIM Bank line of credit be invoiced in INR?
Yes. The policy permits exports backed by EXIM Bank or Government of India lines of credit to be invoiced in Indian rupees.
Does INR settlement completely remove currency risk?
Not necessarily. It can reduce direct exchange-rate exposure for an Indian exporter receiving rupees, but other commercial, banking, pricing and counterparty risks may remain.
