“The Road to a Global Rupee”, India Narrative, October 02, 2025
“The Reserve Bank of India’s latest set of measures to promote the internationalisation of the rupee signal both ambition and pragmatism. They seek to chip away at the structural dominance of the US dollar in India’s regional and global dealings, positioning the Indian currency as a credible medium for trade, finance, and investment. But the announcements also underline the reality that rupee globalisation will be a slow and issue-specific process, contingent on geopolitical stability, macroeconomic credibility, and India’s own willingness to manage capital account openness.
By permitting authorised dealer banks to extend trade-linked loans in rupees to Bhutan, Nepal, and Sri Lanka, the RBI is embedding the currency in South Asia’s economic bloodstream. This is shrewd policy. Nearly 90% of India’s exports to the region already rely on India as their trade partner, making these smaller economies natural laboratories for experimenting with rupee invoicing.
Crucially, it reduces local reliance on the US dollar as an intermediary settlement currency. For debt-laden economies like Sri Lanka, which faced severe dollar shortages during its 2022 financial crisis, rupee-denominated borrowing eases pressure on reserves. For India, it creates a captive demand base for the rupee…..”
Read full article at Indianarrative.com
