Asian Clearing Union (ACU) is 

a payment arrangement whereby the participants settle payments for

intra-regional transactions among the participating central banks on a net multilateral basis. It was
introduced to promote regional co-operation to facilitate payments among member countries
Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka. Also it is
interesting to note that India had barter like mechanism for trade settlement with Iran, wherein Indian
oil refineries were paying in rupees to local Iranian banks and funds were used by Iran to pay for
imports from India.

ADVANCE AGAINST EXPORTS: Indian exporters may receive advance payment against

exports from overseas importers in Indian rupees through the above Rupee Payment Mechanism.
Before allowing any such receipt of advance payment against exports, Indian banks need to ensure
that available funds in these accounts are first used towards payment obligations arising out of
already executed export orders/export payments in the pipeline.
• SETTING-OFF EXPORT RECEIVABLES: ‘Set-off’ of export receivables against import
payables in respect of the same overseas buyer and supplier with facility to make/receive payment of
the balance of export receivables/import payables.
USE OF SURPLUS BALANCE: The surplus amount held in account in accordance with mutual
agreement can be used for:

-Payments for projects and investments.

-Export/Import advance flow management

-Investment in Government Treasury Bills, Government securities, etc. in terms of extant guidelines
and prescribed limits, subject to FEMA and similar statutory provision.
Links
https://www.outlookindia.com/business/trade-settlement-in-rupee-rbi-says-fairly-good-
response-so-far-news-226983
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12358&Mode=0
https://indianexpress.com/article/business/economy/rbi-paves-way-for-global-trade-
settlement-in-rupee-8023456/
https://www.isas.nus.edu.sg/papers/international-trade-settlement-mechanism-in-the-indian-
rupee-benefits-and-implications/
https://www.drishtiias.com/daily-updates/daily-news-analysis/rbi-allows-trade-settlements-in-
rupee
https://indianexpress.com/article/business/economy/india-pushes-rupee-trade-beyond-russia-
8257208/
https://www.cbi.eu/news/how-war-ukraine-affecting-international-trade-and-emerging-
economies#:~:text=From%20a%20trade%20perspective%2C%20the,international%20supply
%20chains%20and%20markets.
https://scroll.in/latest/1028068/rbi-sets-up-mechanism-to-settle-international-trade-
transactions-in-rupee
https://taxguru.in/dgft/international-trade-settlement-indian-rupee-inr.html
https://www.bloomberg.com/news/articles/2022-09-26/india-s-campaign-for-rupee-trade-
finds-fans-from-russia-to-uae
https://timesofindia.indiatimes.com/business/india-business/rbi-introduces-mechanism-for-
international-trade-settlements-in-rupees/articleshow/92806360.cms
https://www.tpci.in/indiabusinesstrade/blogs/rupee-trade-settlement-could-prove-to-be-
historic/
https://www.insightsonindia.com/2022/07/12/rbi-allows-global-trade-settlements-in-rupees/
https://www.business-standard.com/article/finance/uco-bank-used-for-iran-payments-plans-
rupee-trade-with-russia-122092601049_1.html