Trade, container (Photo: Shutterstock)
India and Myanmar on Saturday discussed ways to promote bilateral trade through their local currencies, the rupee and the kyat.
The issue was discussed during a meeting between Commerce and Industry Minister Piyush Goyal and Myanmar Minister for Investment and Foreign Economic Relations Kan Zaw on the sidelines of the 12th East Asia Summit Economic Ministers’ Meeting in Vientiane, Laos.
“We discussed potential cooperation in areas like lentils, diesel, petrol, electric vehicles etc and ways to promote bilateral trade, including through the rupee-kyat monetary mechanism, between our nations,” Goyal said in a post on social media platform X.
Bilateral trade between India and Malaysia is expected to reach $1.75 billion in 2023-24.
India is looking to promote trade in local currencies with several other countries, including the United Arab Emirates, African nations and Russia.
Trading in local currency would reduce transaction costs by eliminating the need to convert currencies twice.
In July 2022, the Reserve Bank of India introduced a system to settle international trade transactions in Indian Rupees (INR).
According to the GTRI think tank, the move was aimed at helping countries in Africa and South Asia struggling with foreign exchange shortages caused by declining exports and tourism post-Covid and those hit by US sanctions.
India’s exports to Myanmar fell to $670.4 million in 2023-24 from $807 million in the previous year. However, imports rose to $1.07 billion in the last fiscal year from $954.74 million in 2022-23.
India imports pulses such as lentils, tur and urad from Myanmar to meet domestic demand. In addition, India imports agricultural products from countries such as Australia, Canada, Mozambique, Tanzania, Sudan and Malawi.
In April, the government said it has made the payment mechanism easier and simpler for traders importing pulses from Myanmar.
Importers have been requested to use direct payment system in rupees/kyats through Special Rupee Vostro Account (SRVA) through Punjab National Bank, the Ministry of Consumer Affairs said in a statement.
India relies on pulse imports to meet domestic shortages. The country imports tur and urad dal from Myanmar.
The Central Bank of Myanmar published the guidelines for payment procedures under SRVA on 26 January 2024.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 21, 2024 | 21:19 IS
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