India, Myanmar agree on bilateral trade in local currencies

Trade talks: India and Myanmar are making their best efforts to boost bilateral trade with local currencies, the Indian Rupee (INR), as well as Myanmar Kyat (MMK). The effort was emphasised by Indian Commerce and Industry Minister Piyush Goyal after meeting Myanmar's Minister of Investment and Foreign Economic Relations, Kan Zaw, on the sidelines of the 12th East Asia Summit Economic Ministers' Meeting in Vientiane, Laos.

Boosted Trade Cooperation

He posted this on social media and marked a scope for potential cooperation in these sectors as well. He had lentils, diesel, gasoline, and electric vehicles. Added that the Rupee -Kyat currency mechanism shall ease the trade between two countries and might develop ties to an economic one as well.

Trade Landscape Today

India's bilateral trade with Myanmar has increased to $1.75 billion in 2023-24. But on the export side, India's trade with Myanmar was abysmal as it dwindled to $670.4 million from $807 million in the previous fiscal. Imports from Myanmar increased to $1.07 billion as against $954.74 million during 2022-23, mainly on account of pulses, including lentils, tur, and urad.

Advantages of Trading in Local Currency

The push to encourage local currency trade gets rid of money, which can be a substantial portion of the larger costs of transactions. On 29 July 2022, Reserve Bank of India constructed an agreement that was thought to make cross-border trade transactions easier in INR to countries with foreign exchange shortages. Support Pulse Imports

Besides, the process of handling trade will be relatively easier due to streamlined and simplified mechanisms adopted by the Indian Government for making payments by traders importing pulses from Myanmar. In this regard, importers are specifically motivated to avail themselves of the Rupee -Kyat direct payment system through Special Rupee Vostro Accounts at Punjab National Bank.
Future Perspective

In a meaningful way, there is an emphasis on trading in local currencies while doing the same kind of agreement with the UAE, African countries, and Russia and so on, which constitutes such a strategic shift toward a more comprehensive economic engagement in the region.