All about respect.

"Noel Tata, Chairman of the CII Africa Committee and Chairman of Tata International Ltd emphasized the growing need for innovative financial strategies to overcome challenges in India-Africa trade," and "highlighted the concept of Rupee trade as a potential solution." ET. In 2023, "The Reserve Bank (RBI) has permitted 20 banks operating in the country to open 92 Special Rupee Vostro accounts (SRVAs) of partner banks from 22 countries as part of efforts to promote bilateral trade in local currencies," which would enable "exporters and importers to invoice and pay in their respective domestic currencies enabling the development of a bilateral foreign exchange market." ET. This would work so long as bilateral trade between the two countries is roughly equal and their currencies are relatively stable. This was exposed almost immediately in June 2023 as, "A lopsided trade relationship with India is forcing Russia to accumulate up to $1 billion each month in rupee assets that remain stranded outside the country" as "Russia has emerged as a top supplier of oil to India over the past year," "But with imports from India stagnating, Russia is ending up with an excess of rupees, which its companies have trouble repatriating because of local currency restrictions." TOI. So,  "Russia has used the rupees in SRVAs to make investments in stocks, government securities, infrastructure schemes and other areas." HT. It is possible that by converting its rupee stockpile from SRVA accounts to foreign portfolio investments, Russian companies may be able to repatriate their money in dollars (India Briefing) even though the process is pretty onerous. On 20 April 2024, "The Indian Rupee (INR) has fallen sharply against the US dollar (USD) in the last one month," wrote Jimeet Modi. Apparently, SRVAs will enable the rupee to become a reserve currency and make it stable. One reason for rupee depreciation is that India runs consumer price index (CPI) inflation at an average of over 6% (RI), while the US targets an inflation rate of 2%. Average inflation in the US went up to 4.7% 2021, 8.0% in 2022 and to 4.1% in 2023  (usinflationcalculator.com). It has been coming down sharply. Another reason is that India consistently runs a trade deficit with most nations. "According the latest data from the Ministry of Commerce and Industry, India's trade deficit in FY 2023-24 is estimated to be $78.12 billion, an improvement of 35.77% compared to FY 2022-23, when it was $121.62 billion." Forbes. To make the rupee a reserve currency they must allow Indian citizens to invest in foreign markets in rupees. But, "Indian regulators have stopped allowing local family offices to set up investment funds in its new finance hub, as they are concerned these arrangements may be used to evade taxes and capital controls, according to people familiar with the matter." ET. Treating citizens like thieves and propping up the rupee with splints do not inspire confidence. That's why India holds USD 241.9 billion worth of US government securities. ET. Hence, "Around 4,300 millionaires are projected to leave India in 2024," and "in 2023 around 5,100 millionaires relocated abroad." Mint. Why would foreigners use the Indian rupee if citizens are prevented from using it? And, uncontrolled inflation keeps debasing the currency. Bring down inflation and treat citizens with respect. Everything else is just hot air. Very polluting.