Indian Economy News & Discussion - Nov 27 2017

[vcsekhar]

Cross posting from Modi 3.0
India’s Big Push: Turning the Rupee Into a Global Currency Amid Trump’s Tariff Shock
— turning the rupee into a global trade currency. From new RBI exchange rate mechanisms and Vostro accounts abroad, to rupee settlement clauses in future trade pacts — I

I fail to see how this can happen without the rupee being a fully convertible currency. Even the RMB cannot be a trade currency as it is not fully convertible. I don't think the govt is ready to make the Rupee fully convertible without restrictions.

[A_Gupta]

Global trade currency without full convertibility? I agree, it can't happen.
However:

India has finalized currency swap arrangements with 23 countries, enabling trade in local currencies and reducing reliance on the US dollar

Out of these 23, AI claims:

These countries have agreed to or are currently using the Indian rupee for trade settlements:

Russia – Rupee trade surged post-sanctions, with Vostro accounts facilitating direct settlements
Sri Lanka – Facing forex shortages, Sri Lanka uses rupee for imports and services
Mauritius – Engaged in rupee-based trade and financial cooperation
UAE – RBI is setting direct rupee-dirham reference rates to enable smoother trade
Indonesia – Similar arrangements underway with rupiah-rupee reference rates
Germany – Among the 18 countries approved for rupee trade
Kenya – Included in RBI’s list for rupee settlement
Singapore – Active participant in rupee-based transactions
UK – Approved for rupee trade under RBI’s framework

[A_Gupta]

India’s manufacturing PMI hits 2-month high at 58.4 in Oct
https://ianslive.in/indias-manufacturin ... 1024111938

New Delhi, Oct 24 (IANS) India’s manufacturing activity showed renewed strength in October, with the HSBC Flash India Manufacturing Purchasing Managers’ Index (PMI) rising to a two-month high of 58.4, up from 57.7 in September, a report showed on Friday.

The data compiled by S&P Global indicates that the country’s manufacturing sector continues to expand at a solid pace, supported by strong domestic demand and easing cost pressures.

The rise in the manufacturing PMI reflects an improvement in business conditions, driven by higher new orders, increased production, and steady employment levels.