How does India intend to deepen trade with the European Union?

2026-03-25

Amid deepening trade relations with the European Union, India is considering the introduction of a real-time euro settlement mechanism.

This initiative by the Reserve Bank of India and the Ministry of Finance aims to reduce transaction costs and increase the efficiency of bilateral trade. The euro direct settlement system will allow businesses to make payments instantly, without relying on the dollar.

Currently, Indian exporters often use the US dollar as an intermediary currency when making payments with European partners, which requires additional conversion costs and time.

According to analysts, this decision indicates India's support for the global trend of diversification of foreign trade and de-dollarization, which will significantly increase the competitiveness of Indian products in the European market.

In addition to traditional bank transfers, India is in talks with the European Central Bank on the interoperability of digital currencies (CBDCs). If the project is successful, India will become one of the first major economies to have a direct, high-tech financial bridge to the Eurozone.

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