In recent years, global dynamics in international trade and commerce have become increasingly uncertain, particularly due to the dominance of the US dollar in global transaction and settlement mechanisms.

The uncertain geopolitical situation has led to a shift from a globalised outlook on trade and economy to transactional diplomacy, prioritising national interests.

For India, threats from western countries to sanction its oil purchases from Russia and the inconsistent tariff policies by the Trump administration have prompted efforts to establish an independent rupee ecosystem, reducing reliance on financial structures dictated by the US and the West.

On October 1, during its Monetary Policy Committee (MPC) meeting, the Reserve Bank of India announced that authorised dealer (AD) banks in India and their overseas branches could extend rupee-denominated loans to residents, businesses, and financial institutions in Nepal, Bhutan, and Sri Lanka.

This policy, effective immediately, aims to facilitate bilateral trade transactions and reduce reliance on third-country currencies like the US dollar through the........

© News18