Embassy of India, Yangon, Myanmar
Ambassador’s Speeches Ambassador’s Speeches

Rupee-Kyat Mechanism

 Speech by Ambassador Abhay Thakur at the Seminar on Scaling up Rupee-Kyat

Trade Settlement mechanism

on 27 June 2025 at SVCC, Embassy of India Yangon

  • Her Excellency Daw Nwe Ni Tun, Director General, Central Bank of Myanmar, Ms. Khine Khine Nwe, Secretary General of UMFCCI, Mr. Naresh Kumar Dinodiya, President of IMCC, representative of various trade bodies and the esteemed business community of Myanmar, and Ladies and Gentlemen.

Good Afternoon / Mingalabar and Namaste.

  • It is an honour and a privilege to welcome you all to today’s seminar, which aims to explore the potential of the Rupee-Kyat Trade Settlement Mechanism as a transformative tool for enhancing bilateral trade between India and Myanmar.
  • India and Myanmar share not only a long border and deep-rooted cultural ties but also a strong economic partnership. Our bilateral trade, anchored in mutual respect and shared interests, holds immense promise. In today’s rapidly evolving geopolitical and financial landscape, the need for alternative, stable, and efficient trade settlement mechanismsis more relevant than ever.

Friends

  • I would like to highlight that in FY 2024-2025, our bilateral trade with Myanmar increased by 23.56%, reaching USD 2.15 billion, up from USD 1.74 billion in FY 2023-2024. India is now the fourth-largest trading partner of Myanmar, compared to seventh last year. Currently, pharmaceutical products represent Myanmar's leading import from India, amounting to USD 183.73 million in FY 2024-2025, compared to USD 172.6 million in FY 2023-2024. Additionally, pulses constitute the major import from Myanmar, which rose to USD 1.3 billion in FY 2024-2025 from USD 917.4 million in FY 2023-2024.

Friends

  • In a recent business meeting, the India-Myanmar Chamber of Commerce had deliberate on the setting a target on USD 5 billion for our bilateral trade, to be achieved in the next few, say 5, years. There are many more opportunities that we must explore together. We must continue to focus on expanding trade across key sectors such as infrastructure, agriculture, technology, and renewable energy and Rupee-Kyat Trade Settlement mechanism can play key role to achieve this target.
  • The Rupee-Kyat trade settlement mechanism was operatialized in January 2024 to enhance bilateral trade. Since then, over 50 transactions have occurred, totaling INR 35 crore. However the use of Rupee-Kyat trade Settlement mechanism is below potential due to lack of knowledge and awareness.

Friends

  • Under this trade settlement initiative, Indian Rupees (INR) can be used directly in bilateral transactions, which presents a strategic opportunity. It is designed to facilitate ease of doing business, conduct direct bilateral trade transaction, reduce dependence on other currencies, and minimize transaction costs and delays due to currency conversion or global market fluctuations.
  • RBI has approved the Punjab National Bank (PNB) as a nodal agency to coordinate its implementation with the Govt. of Myanmar. Central Bank of Myanmar (CBM) has accorded approval to 9 Myanmar’s banks that are currently working with PNB.

Ladies and Gentleman

  • With Myanmar's pulses exports of over 1 billion USD, and requirement of pharmaceuticals, machinery, cement, vehicles and fuel in substantive quantities from India, the scope of expanding our trade under the Rupee mechanism is immense.
  • The primary objective of today’s session is to bring together key stakeholders—traders, financial institutions, policy makers, and government representatives—to deliberate on the practical implementation of this mechanism, address challenges, and identify actionable steps to scale it up.
  • We are particularly keen to hear from trading firms and businessesabout their on-ground experiences, expectations, and any bottlenecks faced while engaging in cross-border trade. Your insights are critical to shaping an ecosystem that is responsive to market realities.
  • Financial institutions, including commercial banks, have a crucial role to play. Their proactive involvement in facilitating Rupee-Kyat transactions, establishing necessary correspondent banking arrangements, and building trader confidence is essential. We look forward to learning how banking infrastructure can be further strengthened to make this settlement route smoother and more reliable.

Friends

  • We also view this mechanism as a step towards promoting greater regional economic integration, in line with broader initiatives such as India’s Act East Policy and ASEAN-India connectivity efforts. Myanmar's unique position as a gateway between South and Southeast Asia makes such cooperation not only beneficial but necessary for broader regional prosperity.
  • I hope today’s discussions will serve as a springboard for practical solutions, new partnerships, and increased confidence among stakeholders to adopt local currency trade.
  • Let me conclude by thanking all participants for their presence and contribution. Let us continue to work together to unlock the full potential of the Rupee-Kyat trade mechanism and chart a path toward a more robust and self-reliant bilateral economic relationship.

Thank you. Dhanyavaad.

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