India-B’desh trade settlement in INR to boost bilateral commerce: CII EXIM committee chief

Kolkata: Bangladesh and India launched a Trade Settlement in Indian Rupee (INR) with the broad objective of reducing dependency on the US dollar and strengthening regional currency and trade, the CII National Committee on EXIM chairman and Patton Group MD Sanjay Budhia said.

This is a very welcome step. This would certainly promote growth of trade between the nations and support the increasing interest of the global trading community in INR.

Since all exports and imports and settlement of trade transactions under this arrangement may be denominated and invoiced in Rupee (INR), this would reduce dependence on the US Dollar and would address situations like scarcity of Forex Reserves apart from strengthening regional currency and trade.

This move will help promote bilateral trade between Bangladesh and India. Due to this arrangement, the transaction costs during trade between the countries will reduce thereby boosting the Indian exports to Bangladesh.

Bangladesh is currently facing scarcity of Forex Reserves and the provision of trade settlement in INR would greatly help address the situation resulting in increase in import demands from India.

Trade settlement in INR alleviates exchange rate uncertainties for Indian enterprises by obviating the necessity of using US dollar in advance of conducting financial transactions and it would have similar effects on Bangladesh too. This will go a long way in further enhancing the already significant economic relations between India and Bangladesh through economically efficient cross-border transactions. Now Industry should take advantage of this arrangement to promote bilateral trade. Industry must focus on quality and standards and create a wide-ranging awareness dissemination program on compliances for exports. Focus should also be on skill development and technology adoption. A Technology Fund could be created through which the Government could fund R&D and innovation projects, with the private sector contributing 60 per cent and 40 per cent coming from the Technology Fund.

Industry could look at taking business delegations to Bangladesh to better explore the market.