Tz-India trade in local currencies impresses business community

MEMBERS of the business community have welcomed initiatives by India and Tanzania to start using local currencies in making purchases, saying the move will facilitate trade and boost the economy.

They were speaking during a stakeholder meeting held for familiarisation with the new arrangement that was introduced recently.

Under the new arrangement, Tanzanian businessmen and their Indian counterparts will now be able to conduct business using their respective currencies, the Tanzanian shilling and the Indian rupee.

Speaking during the meeting, the Acting Executive Director of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) Mr Nebart Mwapwele said in Dar es Salaam recently that the initiative will contribute to make the local currency stronger.

“We ask Tanzanian businessmen to make better use of this opportunity that has been created for the sake of increasing the trade volume between our two countries,” he said.

According to him, before the introduction of the new system, businessmen of the two countries were forced to change their currencies into dollars before doing any transaction.

“With the use of our currencies, we will be able to get a larger quantity of goods and products compared to the situation in the past,” he noted.

India is one of the large markets of Tanzanian agricultural produce and they are also exporters of industrial goods, medicines, clothes and food items.

Statistics from the Indian High Commission to Tanzania show that the trade volume between the two countries stood at 4.5 billion US Dollars (around 10.4tri/-) in the year ending March 2022.

According to Binaya Pradhan, the Indian High Commissioner to Tanzania, between April 2021 and March 2022, India’s exports to Tanzania totalled 2.3 billion US dollars (around 5.3tri/-), while its imports from the East African country were estimated to be 2.2 billion (5.1tri/-).

Regarding the new arrangement, the Indian diplomat said with the use of local currencies, trade between the two countries will reach 6 billion US dollars (about 13.8tri/-) by the end of this year.

“The use of local currencies in trading between India and Tanzania aims at reducing the cost of money exchange as well as other transaction charges hence improving business and economies of both parts,” he said.

Already, the Reserve Bank of India (RBI) has paved the way for trade using local currencies by allowing authorised Indian banks to open Special Rupee Vestro Accounts (SRVA) in Tanzania.

Moreover, the Bank of Baroda, which has branches operating in Tanzania, has received RBI’s approval for opening SRVAs for its foreign branches and subsidiaries situated in various countries, including Tanzania.

According to him, banks that are operating in the country including CRDB, NMB and NBC will be linked to the Indian banks for the sake of facilitating transactions by traders between Tanzania and India.

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