Trade settlements between India and Tanzania have been recently taking place in local currencies, said Indian External Affairs Minister S Jaishankar on Saturday. He added that this recent move will aid business between the two countries. During a conference, S Jaishankar claimed that trade between India and Tanzania has been moving on a growth trajectory and generated USD 6.4 billion in 2022-23.
Jaishankar said, “Now, bear in mind, this is not only a very substantial bilateral trade, but it’s also actually a bilateral trade, which is getting increasingly balanced. Many new products are being added to the trade basket…India remains the biggest destination for Tanzanian exports.” He added, “There’s also an issue which has been brought up from time to time, which is the possibility of trade settlements in our own currencies.”
“And I want to share with you that the India central bank has cleared such a possibility. So the three Indian banks, which are here, have that ability to do trade settlements in each other’s currencies. I am told few transactions have already taken place in Indian rupees and Tanzanian shillings, and certainly this will provide an additional mechanism to promote trade between our two countries,” he said.
The Reserve Bank of India and the Indian Finance Ministry ordered the top executives of banks and members of trade organizations to promote export and import transactions in rupees last year. To replace the more preferred mode of transaction, US Dollars, the Indian government intended Indian banks should contact their global counterparts to open special rupee vostro accounts.
Indian banks have their special vostro accounts with close to 18 nations. Jaishankar said that India’s trade with Africa stood at USD 98 billion.
“India’s investments are USD 75 billion, and we are expecting both this trade with Africa and investments in Africa to grow, and I certainly, so agree with what you said, which is that now that there is a pan-African larger continental free trade arrangement in the making, as it unfolds, I think it makes it easier to both trade with Africa and invest in Africa,” he said.
