Piyush Goyal meets Kan Zaw, Myanmar's Minister of Investment and Foreign Economic Relations.
Credit: @PiyushGoyal
New Delhi: India and Myanmar on Saturday discussed ways to promote bilateral trade through their local currencies rupee and kyat.
The issue was discussed during the meeting between Commerce and Industry Minister Piyush Goyal and Kan Zaw, Myanmar's Minister of Investment and Foreign Economic Relations, on the sidelines of the 12th East Asia Summit Economic Ministers' Meeting at Vientiane, Laos.
"Discussed potential cooperation in areas like lentils, diesel, gasoline, electric vehicles, etc and ways to promote bilateral trade including through Rupee-Kyat currency mechanism, between our nations," Goyal said in a post on social media platform X.
India-Maynmar bilateral trade stood at $1.75 billion in 2023-24.
India is looking at promoting trade in local currencies with various other countries including UAE, African nations and Russia.
Local currency trading would reduce transaction costs by eliminating the need to convert currencies twice.
In July 2022, the Reserve Bank of India introduced a system for settling international trade transactions in the Indian Rupee (INR).
According to the think tank GTRI, the move was meant to aid countries in Africa and South Asia struggling with foreign exchange shortages caused by the post-Covid decline in exports and tourism and those affected by US sanctions.
India's exports to Myanmar dipped to $670.4 million in 2023-24 from $807 million in the previous year. Imports however increased to $1.07 billion last fiscal from $954.74 million in 2022-23.
India imports pulses like lentils, tur, and urad from Myanmar to meet domestic demand. Besides India imports agri commodities from countries like Australia, Canada, Mozambique, Tanzania, Sudan and Malawi.
In April, the government said the payment mechanism for traders importing pulses from Myanmar has been eased and simplified.
The importers have been asked to utilize Rupee/ Kyat direct payment system using Special Rupee Vostro Account (SRVA) through Punjab National Bank, the consumer affairs ministry said in a statement.
India depends on imports of pulses to meet the domestic shortage. The country imports tur and urad dals from Myanmar.
The Central Bank of Myanmar released guidelines for payment procedures under SRVA on January 26, 2024.