According to Dammu Ravi, Secretary (Economic Relations) in the Ministry of External Affairs, India plans to investigate commercial activity in local currencies with Tanzania. We are looking at new areas of cooperation, such as trade in local currencies. It has been noted that the Reserve Bank of India (Indian Central Bank) has cleared the way for trade using local currencies – Indian Rupee (INR) and Tanzanian Shilling – by allowing authorised banks in India to open Special Rupee Vostro Accounts (SRVA) of Tanzanian correspondent banks, and that transactions using this mechanism have already materialised. Both parties agreed to continue conversations in order to address any issues and maintain the long-term viability of this agreement. Several foreign banks have opened particular Rupee vostro accounts in Indian banks to deal in local currencies.
Tanzania and India Forge New Trade Pathways With Local Currency Trade
Domestic banks are able to provide foreign banking services to clients with global banking needs by virtue of vostro accounts. Last year, the Reserve Bank of India implemented a policy enabling transactions in domestic currencies in order to stimulate global trade growth, with a focus on Indian exports, and to increase interest in the rupee. Tanzanian President Samia Suluhu Hassan is in India at the request of President Droupadi Murmu. A high-level delegation followed President Hassan. In order to deepen bilateral relations and increase collaboration across all sectors, the two presidents stated that the Indo-Tanzania connection has been elevated to the rank of 'Strategic Partnership.
Both parties agreed that the strategic relationship will enable the two countries to collaborate on topics such as maritime security, defence cooperation, development partnership, trade and investment, and others. Tanzanian cashew nuts, pigeon peas, spices, avocado, and other agricultural goods continue to be important exports to India. Both parties committed to reviving their collaboration in this area. Both countries have a bilateral trade of $6.4 billion, of which India's exports alone amount to $3.9 billion and imports worth $2.4 billion in 2022-23. India has made over $3.7 billion in investments across several sectors, making it the fifth largest investor in Tanzania.
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