NEW DELHI: The trajectory of many of the ‘Global South’ countries has not been smooth or linear for the past hundred years. Breaking the shackles of colonization for many was only the job half done. The rest required careful hard work in the right sectors to survive and thrive. Countries like China and Singapore are excellent examples of the above, where the former has lifted millions out of poverty and the latter is a prime example of how much a country can achieve if governed properly. India has gone through a similar ‘Hero’s Journey’ since its independence. In less than 80 years since then, it has overcome major hurdles such as bankruptcy to now having the Indian Rupee used as the primary currency in over 18 countries around the world.
Now traders will be able to import goods from other countries by paying in rupees. The Reserve Bank Of India (RBI), has allowed 18 countries including Germany, Kenya, Sri Lanka, Singapore, and the UK amongst others to transact in the Indian Rupee. This move will be facilitated by the VOSTRO accounts which will be opened in Indian banks. These accounts will be used by foreign companies to invest in Indian companies and buy their goods and services. Financial expert, Kishore Subramanian from Shree Consultants notes that this will help in reducing complicated trade-related transaction costs, boost the overall trade in India and ultimately reduce the trade deficit as well.
One of the main drivers of the globalisation of the Indian rupee has been the growth of the Indian economy. India has emerged as one of the fastest-growing economies in the world, with a GDP growth rate that has consistently been above 5% for many years. This growth has attracted foreign investors who are looking for new opportunities in emerging markets.
Another factor that has contributed to the globalisation of the Indian rupee is the increasing use of digital technologies for financial transactions. India has been at the forefront of the digital revolution in finance, with the introduction of innovative payment systems such as Unified Payments Interface (UPI) and digital wallets like Paytm. These technologies have made it easier for people to transact in Indian rupees, even if they are not physically present in India.
It will further boost trade with South-Asian countries such as Nepal, Sri Lanka, and Bhutan. The BRICS countries have already tried to de-Dollarize the international market following the sanctions imposed on Russia by Western countries. This has given countries like China and India the opportunity to emerge as potential alternatives to the US and its currency.
For the Indian Rupee to become even more widely accepted and become more mainstream with respect to trade, it will have to cross uncharted territory. This will require a lot of patience and good bilateral relations and soft power relations with many countries around the world. As of the present moment, the future of the Indian Rupee looks bright and extremely promising.
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