(An internet-based study drawing on authentic primary and secondary sources, primarily the RBI Annual Report 2025-26 and related official releases)
INR based settlements - highlights
- Per the RBI Annual Report 2025-26, rupee-settled exports touched ₹3,27,370 crore and imports ₹2,84,688 crore.
- Approximately 5% of India’s overall international trade is now completely invoiced and settled in INR.
- Active SRVA framework now covers 30+ countries.
- Liberalisations from 2022 on INR based trade settlements, removing prior approvals and allowing surplus balances to be invested in G-secs, T-bills, and Indian corporate debt instruments etc.
The internationalisation of the Indian Rupee is not a sudden sprint but a deliberate, multi-year strategic journey. The Reserve Bank of India (RBI), in coordination with global partners, has steadily built the operational infrastructure and policy framework to expand the INR’s role in cross-border trade and finance. Recent data confirms that this foundation is now delivering tangible results.
The Policy Foundation (2022 Onwards)
Since the landmark 2022 framework for international trade settlement in INR—built around Special Rupee Vostro Accounts (SRVA) and bilateral arrangements—India has removed several procedural frictions. Key liberalisations, including those notified in 2025, eliminated the need for prior approvals in many cases and permitted surplus balances in SRVAs to be invested in Government Securities (G-secs), Treasury Bills, and Indian corporate debt instruments.
These steps reduce transaction costs, minimise exchange-rate risk for Indian traders, and create reciprocal benefits for partner countries. The SRVA mechanism now operates with correspondent banks across 30+ countries, creating a growing network that supports invoicing and settlement without mandatory recourse to third-country hard currencies.
By the Numbers: Clear Momentum in 2025-26
The RBI Annual Report 2025-26 documents a clear acceleration. According to the report (Chapter on Financial Markets and Foreign Exchange Management):
- The value of exports invoiced in INR reached approximately ₹3.27 lakh crore in 2025-26.
- The value of imports invoiced in INR reached approximately ₹2.85 lakh crore (₹2,84,688 crore in some rounded references).
Year-on-year growth in 2025-26 was robust:
- Export invoicing: +6.5%
- Import invoicing: +9.5%
- Export settlement: +2.7%
- Import settlement: +41.2%
Over the longer period (August 2022 – July 2025), the compound annual growth rate (CAGR) stood at 20.9% for imports invoiced in INR and 12.7% for exports invoiced in INR. Approximately 5% of India’s overall international trade is now being invoiced and settled in INR — a meaningful structural shift, even if the absolute share remains modest in global terms. This marks a steady move away from exclusive reliance on major convertible currencies for a growing slice of trade.
Enhanced transparency is also evident: from early 2026, the RBI has been publishing dedicated monthly data on INR-based invoicing and settlement, allowing better tracking of trends.
Emerging Market Signals
Beyond official data, market behaviour offers interesting signals. In recent weeks, the INR has shown resilience, moving from levels above 96 against the US dollar in May 2026 to consistently trading below 94–95 in June. While the RBI maintains a managed float, observers note that recent strengthening episodes appear driven more by underlying market flows and sentiment than minute-to-minute regulatory intervention. Growing international willingness to hold and transact in INR reflects rising confidence in India’s macro fundamentals and the credibility of its currency framework.
What This Means for India’s External Sector Resilience and Global Trade Positioning
The progress carries several important implications for the coming years:
1. Greater External Sector Resilience
Reduced dependence on hard currencies for a portion of trade lowers vulnerability to global dollar liquidity shocks, sudden stops in capital flows, or geopolitical disruptions affecting correspondent banking. Indian exporters and importers gain natural hedges against exchange-rate volatility. For the economy as a whole, lower requirements for costly forex reserves to cover INR-settled transactions free up resources for more productive uses.
2. Trade Diversification and Reciprocity
The SRVA framework has proven especially useful with partners facing forex constraints. It facilitates trade that might otherwise be hampered and encourages reciprocal use of partner currencies in some cases. This supports India’s broader strategy of building resilient supply chains and reducing over-reliance on any single currency or payment rails.
3. Deeper Financial Markets and Capital Inflows
Allowing surplus SRVA balances to be invested in G-secs, T-bills, and corporate debt instruments channels stable, longer-term funds into Indian markets. This deepens domestic bond markets, improves liquidity, and can gradually lower borrowing costs for Indian entities — a virtuous cycle for financial development.
4. Strategic Global Positioning
While the INR’s share in global trade and reserves remains small compared with the US dollar or euro (as expected in a long-term process), the direction is unambiguous. A stronger invoicing currency enhances India’s voice in international financial governance and supports the gradual emergence of a more multipolar currency system. It also aligns with India’s growing economic weight (strong GDP growth, large domestic market, and improving ease of doing business).
Challenges remain. Full internationalisation requires continued progress on macroeconomic stability, deeper and more liquid financial markets, gradual capital-account reforms, and sustained trust in the currency’s long-term value. Network effects and inertia favour incumbent currencies, so gains will likely remain incremental rather than explosive.
Overall, however, the trajectory strengthens India’s external sector resilience. It provides a buffer against global volatility, lowers structural costs for traders, and positions the country more favourably in an evolving global financial architecture. The operational rails are now significantly stronger than they were even three years ago.
Conclusion
The internationalisation of the Indian Rupee is a marathon built on careful policy sequencing, institutional credibility, and expanding bilateral trust. The RBI’s 2025-26 data shows that the post-2022 framework is working. With 30+ countries in the SRVA network, liberalised investment options for surpluses, regular data transparency, and visible market confidence, the INR has moved from policy aspiration to operational reality in a growing segment of India’s trade.
For India’s external sector, this translates into modestly but meaningfully improved resilience and greater strategic autonomy in global trade and finance. The journey continues — steady, strategic, and increasingly visible.
References
- RBI Annual Report 2025-26 (Chapter V: Financial Markets and Foreign Exchange Management)
- RBI publications and notifications on SRVA and international trade settlement in INR (2022–2025)
- Summaries and reporting: Rediff Business (29 May 2026), The Hindu Business Line
- PIB releases on related measures
- PwC note on global trade settlement in INR
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