How successful are India’s efforts to conduct international trade in rupee?

livemint.com:

international trade, the Reserve Bank of India (RBI) last year in July allowed invoicing and payments for international trade in domestic currency. The move was largely seen as part of the effort to bring down India’s massive oil import bill by purchasing Russian oil in domestic currency.

Mint takes a look at how fruitful these efforts have proved. The government has said in the Parliament that it has started conducting trade in the rupee with neighboring countries such as Nepal and Bhutan.

Besides, the Minister of State for Commerce and Industry Anupriya Patel said rupee trade mechanism has been initiated in case of trade with Russia, too Till 2 July 2, RBI had approved 34 applications from different Russian banks for opening Special Rupee Vostro Account in 14 Indian commercial banks. Patel added that Sri Lanka has included the Indian rupee in its list of designated foreign currencies and that eight corresponding banks from Sri Lanka have been opened with respective Authorized dealer (AD) banks in India.

Indian importers undertaking imports through this mechanism make payment in Indian rupee that is credited into the special vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas supplier. Indian exporters, undertaking exports of goods and services through this mechanism, get paid the export proceeds in Indian rupees from the balances in the designated special vostro account of the correspondent bank of the partner country.

India has been broadening access to vostro accounts. The government told the Parliament that New Delhi has allowed banks in 22 partner countries, including Russia and the UK, to open vostro accounts in the country.