Exporters can now invoice in rupees without losing Foreign Trade Policy benefits

The Directorate General of Foreign Trade amended the Foreign Trade Policy 2023 on Thursday, with immediate effect, so that exporters who invoice and get paid in Indian rupees are no longer left wondering whether those receipts count. Notification No. 30/2026-27 changes two FTP provisions on the denomination of export contracts and on eligibility for policy benefits, and brings them into line with the Reserve Bank of India's Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.

For countries outside the Asian Clearing Union, export contracts and invoices can now be denominated in rupees or in any foreign currency, and payments can be received in either. Eligible rupee receipts, routed through approved banking channels, will qualify for FTP benefits and count towards export obligations, on par with freely convertible currency. Exports financed through EXIM Bank or Government of India lines of credit can also be invoiced in rupees. Nepal and Bhutan stay on their own track: contracts with those two countries must generally be denominated and settled in rupees, or as the RBI directs.

The ACU is a 1974 settlement club of nine members, Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka, each represented by its central bank. For Bangladesh, Iran, Maldives, Myanmar, Pakistan and Sri Lanka, contracts must use a currency the ACU specifies, although invoicing and settlement may also follow RBI directions. Iran remains inside that framework, but trade in sensitive goods still has to comply with paragraph 2.19 of the FTP, which covers items linked to nuclear activities and delivery systems under UN Security Council Resolution 2231.

Until this week, the RBI already allowed wider rupee use in cross-border payments. The gap was on the trade-policy side. Exporters who took rupees through an approved channel could not always be sure the receipt would unlock incentives or meet an export obligation. Thursday's notification closes that gap on paper.

The rupee-for-trade story has been a speech for years, and this is the bureaucratic version of putting the speech into a form exporters can file. I would not confuse the two. Ajay Srivastava of the Global Trade Research Initiative welcomed the alignment and then said the thing that actually matters: foreign buyers still have to obtain rupees, and overseas banks still have to be willing to hold them. The currency is not fully convertible. Trade imbalances leave some partners sitting on balances they cannot usefully spend. Hedging is expensive. The dollar is still the default. Permission is cheap. A correspondent bank that wants to warehouse rupees is the harder problem.

Watch whether the government follows the notification with the plumbing GTRI listed: country-specific settlement arrangements, simpler banking, cheaper hedges, rupee export credit and ECGC cover. Without that, rupee invoicing stays a facility for the exporter who already has a willing buyer, not a way of doing trade.