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Egypt is the latest entrant into the club of countries wishing to trade INR

Workers unload sacks of rice from a supply truck at India’s main rice port at Kakinada Anchorage in the southern Indian state of Andhra Pradesh. FILE/Reuters.

New Delhi: Facing difficulties in making the payment in dollars, Egypt is now seeking to adopt the rupee to import at least 1.5 lakh tons of rice from India.

If the agreement to regulate the trade of Indian rupee between Cairo and New Delhi is reached, Egypt will join 18 countries – Russia, United Kingdom, Singapore, Germany, etc. – who have agreed to trade in INR and give up the dollar for cross-border transactions.

Between April and January of this fiscal year, Egypt imported 76,858 tons of rice. The country recently bought two shipments of rice, but faced “tremendous difficulties” in settling the trade in dollars, according to a report by The Hindu Business Line quoted a source saying.

Read also : Rupee edges closer to replacing dollar as 18 countries agree to trade INR

Now that Egypt needs another six shipments of rice, which could weigh more than 1.5 lakh tonnes, it has sought to make payment in INR, the source added.

Willing to take orders in rupee route

Indian exporters have said they are ready to settle cross-border trade in food grains in rupees, provided the Union government offers certain concessions.

“Exporters get a 0.5% to 1% futures premium when trading in dollars. The government can compensate traders in several ways,” the report quoted Rice Exporters Association (TREA) Chairman BV Krishna Rao as saying.

Rao added that the government should facilitate export transactions in INR in the long term interest.

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Egypt and most North African countries have faced foreign exchange problems, particularly with regard to the dollar.

To facilitate trade, Egypt has started trade relations with Russia in local currencies.

Since September 8, 2022, the Indian government has curbed rice exports and imposed a duty on the export of white rice.

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The country has also banned the shipment of fully broken rice, rice exports including Basmati. The decision was taken after fears were raised that India’s rice production during the kharif season had been affected by scanty rains in major producing areas.

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