India and Mauritius Sign Pact to Boost Local Currencies Based Trade

The Reserve Bank of India (RBI) and the Bank of Mauritius (BOM) have signed an agreement to facilitate cross-border transactions in Indian Rupees (INR) and Mauritian Rupees (MUR). This initiative aims to strengthen financial cooperation, reduce transaction costs, and promote trade between the two nations.

Framework for Local Currency Transactions

The Memorandum of Understanding (MoU) was signed by RBI Governor Sanjay Malhotra and BOM Governor Rama Krishna Sithanen G.C.S.K. in the presence of Prime Ministers Narendra Modi and Navinchandra Ramgoolam. The agreement allows for invoicing and settlement in INR and MUR for all current account transactions and permissible capital account transactions. By fostering an INR-MUR market, the initiative seeks to enhance trade efficiency, lower transaction costs, and expedite payment settlements.

Strengthening Bilateral Relations and Cooperation

The currency agreement was part of a broader set of bilateral engagements during Modi’s visit to Mauritius. Other agreements included a credit facility deal with the State Bank of India, collaboration in MSME development, governance, maritime security, and financial crime prevention. Modi also inaugurated the Atal Bihari Vajpayee Institute of Public Service and Innovation, a new health centre, and 20 High Impact Community Development Projects. Additionally, India pledged support for constructing a new Parliament building and advancing Phase II of the HICDP initiative.

Conclusion

The INR-MUR trade framework marks a significant step in strengthening financial and economic ties between India and Mauritius. With deeper financial integration and strategic bilateral cooperation, the initiative is expected to enhance trade efficiency and further solidify the longstanding relationship between the two nations.

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