India and Bangladesh launched a trade transaction in rupees at an event jointly organised by the High Commission of India and Bangladesh Bank in Dhaka. This is Bangladesh’s first bilateral trade with a foreign country in a currency other than the US dollar. The move aims to reduce dependence on the US dollar and strengthen regional currency and trade. 

In the inaugural trade, Sonali Bank and Eastern Bank of Bangladesh handed over two export letters of credit for Rs 2.8 crore from two Bangladeshi companies, Tamim Agro and Shahjahan Mia. From the Indian side, the State Bank of India and ICICI Bank handed over two import letters of credit worth Rs 1.2 crore from two Indian companies, Nita Company and Abdul Matlub Ahmad.

The total two-way trade between the two countries currently stands at nearly $16 billion, of which exports from Bangladesh to India are worth $2 billion and Bangladesh’s imports from India amount to $13.69 billion, according to the latest official data.  

From now, exports to India amount from Bangladesh will be initially transacted using the rupee and imports from India to Bangladesh will be settled in US dollars. The Bangladeshi currency, Taka, would be used gradually when the trade gap between the two countries decreases.

Bangladesh became the 19th country to trade with India in rupees. It is India’s biggest trade partner in South Asia, with the latter being its second-largest trade partner in Asia.

The move is expected to reduce pressure on Bangladesh’s declining foreign exchange reserves since external payments have continued to outpace export and remittance revenues.