The Southern India Mills Association (SIMA) has welcomed the RBI announcement on the international trade settlement in Indian rupees, saying this would benefit Indian exporters and importers, who have been facing challenges owing to the tightening of monetary policies all over the world.

SIMA says the policy would encourage countries having substantial trade with India and having a forex shortage to increase their trade thereby opening more opportunities to boost exports apart from helping India reduce its trade deficits on account of oil imports. Though the real benefit would be reaped only after considerable time, in the long run this would encourage several countries intending to trade in Indian rupees to opt for such trade and thereby make the rupee a currency for international trade.  

Since several textile exporters are struggling to realize the money from certain countries, including Russia and Sri Lanka that are currently facing economic crisis and sanctions, the RBI decision would greatly help to settle export/import payments and encourage a cordial trade relationship.

The Indian textile and clothing industry’s exports account for around 10 per cent of the country’s exports. The textile industry has been facing challenges on account of volatility in forex rates especially the US dollar rates.  The rupee has depreciated to a record level in recent days.