India is in talks with Sudan to initiate bilateral trade in Rupees. This move is in line with the country’s recent efforts to moot transactions in local currencies, internationalize Rupee, and give a breather to vexed Forex reserves.
To facilitate this, the Reserve Bank of India (RBI), in July, gave a framework for international trade settlement in Rupee, with particular emphasis to increase exports from India. Such transactions will be through special Rupee Vostro accounts.
Currently, India and Russia bilateral transactions are being initiated through a similar mechanism, as Russia is facing West-backed sanctions for its war with Ukraine. YES Bank in India is in the process of setting up a Rupee-trade mechanism.
Bankers have already held discussions with Cuba and Luxemburg for payment in Rupees. The Commerce and External affairs ministry is also in talks with Saudi Arabia and the United Arab Emirates for rupee trade.
Sudan is the 75th largest trade partner of India, and the trade value between the nations is pegged at $1.21 billion. While India exports $1.07 billion worth of goods from Sudan, its imports from Sudan stand at a mere $129 million. However, once the two countries implement the rupee trade mechanism, India will be able to import crude oil from Sudan.
Earlier, during the eve of Africa day, in May, India’s ambassador to Sudan BS Mubarak said there is evidence to point to trade between the Indus valley civilization and Nilotic via Mesapatomia some 5000 years back.
India exports food products, manufactured goods, machinery and equipment, chemicals and petroleum, pharmaceuticals, and textile products to Sudan. And imports sesame seeds, watermelon seeds, ground nuts, cotton, hide, and skin from the African country.
The Business Standard quoted sources from the External Affairs Ministry to say that India has reached out to Sudan with a proposal for rupee trade. However, Sudan is yet to decide on this.