India, Kenya discuss possibility of trade settlement in local currencies

India and Kenya have discussed the possibility of settling trade transactions in local currencies to further promote two-way commerce, an official statement said on Wednesday.

Discussions on digital public infrastructure covered collaboration on UPI-like payment systems, Bharat Connect and digital platforms to enhance financial inclusion, which also helps officials of the two nations.

These issues were discussed in the India-Kenya Joint Trade Committee meeting on April 27-28.

It was co-chaired by Commerce Secretary Rajesh Agrawal and Principal Secretary, State Department for Trade, Kenya, Regina Akotah Ombam, in Nairobi.

“Both sides acknowledged the potential for promoting trade settlement in local currencies. The possibility of adopting a Local Currency Settlement (LCS) mechanism was also discussed,” the Commerce Ministry said.

It was noted that Kenyan banks have opened Special Rupee Vostro Accounts (SRVAs) with Indian banks, and greater utilisation of this framework could facilitate smoother bilateral transactions.

The two countries have discussed ways to enhance trade diversification, address market access issues and leverage complementarities in sectors, such as engineering goods, pharmaceuticals, agriculture and electronics.

It said that an MoU was also signed between the Central Board of Indirect Taxes and Customs (CBIC) and the Kenya Revenue Authority (KRA) for the exchange of pre-arrival customs information, with emphasis on streamlining customs procedures and improving ease of doing business.

The total bilateral trade stood at $4.31 billion in 2025-26, reflecting an increase of 24.91 per cent from $3.45 billion in 2024-25.