The Reserve Bank of India (RBI) on December 16, 2025, issued a notification regarding the Steps to encourage the use of the Indian Rupee and local/national currencies to settle cross-border transactions – Liberalization of FEMA regulations.
To promote the use of the Indian Rupee (INR) in cross-border trade, the Reserve Bank of India introduced the Special Rupee Vostro Account (SRVA) in July 2022, with several foreign banks subsequently opening SRVAs in India. Additionally, MoUs have been signed with the UAE, Indonesia, and Maldives to encourage local currency transactions. In December 2023, the Foreign Exchange Management Regulations were amended to allow cross-border transactions in INR and local currencies.
Following a review, further changes under FEMA, 1999 have been made. Overseas branches of Authorized Dealer banks can now open INR accounts for non-residents for permissible transactions with residents. Non-residents can use their repatriable INR balances for bona fide transactions with other non-residents and for foreign investment, including FDI in non-debt instruments. Indian exporters can open accounts in foreign currencies abroad for trade settlements, including receiving export proceeds and paying for imports. The revised regulations and directions have been issued to implement these changes.
[Notification No. 2024-2025/1940]
