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Cross-border trade in local currencies to shape India's forex markets in coming decade: Rohit Jain
Aug-21-2026

Highlighting drivers which will shape India's forex markets in the coming decade, RBI Deputy Governor Rohit Jain has said that local currencies will play an ever-increasing role in cross-border trade and payments as they lower transaction costs, reduce currency mismatches, and improve settlement efficiency. He added that Special Rupee Vostro Account (SRVA) framework for invoicing, payment and settlement of international trade in rupees has been implemented keeping in view the evolving dynamics of India’s international trade. He pointed that the success of SRVA will depend on commercial viability, emphasis on trade settlement in local currencies, offering market-determined rates, and strengthening confidence in the settlement ecosystem.

He emphasized that markets are continuously evolving and parameters of their readiness are being regularly renewed according to the needs of the time. He added that Indian market would be ready for the next decade if it can help facilitate India's ever-increasing engagement with other countries, absorb shocks in a non-disruptive manner, serve the smallest user as efficiently as the biggest, and embrace new technology without vitiating the trust it has earned. Besides, he referred technology adoption across the customer chain as another driver to shape India's forex markets. He said that foreign exchange transactions of the next decade should be digital from origination to reporting. He added that artificial intelligence and machine learning can genuinely assist in document classification, anomaly detection and the identification of reporting inconsistencies.

He said that the Indian market faces certain challenges in realising its full potential. He added that participation remains skewed as public sector banks, which hold deep relationships with MSMEs and smaller corporates outside the metros, under-participate in forex derivatives relative to their balance sheet size. He suggested that expanding the market-maker base, raising public sector bank participation, and encouraging electronic platforms are necessary priorities to be pursued. He also highlighted that unauthorised entities offering online forex trading are seen to operate outside Foreign Exchange Management Act (FEMA) and Electronic Trading Platform (ETP) regulation altogether. He noted that RBI’s Alert List, cautionary advisories and awareness campaigns address this from the regulator's side, while the heavier responsibility rests with Foreign Exchange Dealers' Association of India (FEDAI) members and the banks who deal with the public every day.

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