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New Delhi: Asia Pacific economies could expand bilateral trade invoicing and settlement in local currencies for goods where intra-regional trade is strong such as textiles, chemicals, metals, and machinery which can then be extended to services, capital goods, and project finance, India Exim Bank said Monday.
Citing the use of the Indian Rupee in trade settlements and its line of credit to the Maldives, the bank said that local-currency initiatives can serve as catalysts for regional integration and economic stability.
It also pushed for interoperable digital systems for trade documentation, traceability, interoperable transport networks that link ports, railways and inland logistics hubs to reduce transit times and lower costs.
“Creating interoperable payment systems and linking domestic real-time gross settlement (RTGS) and fast-payment networks will be critical to enable seamless cross-border settlements in local currencies,” India Exim Bank said in a working paper, adding that central banks can play a coordinating role by establishing bilateral swap lines and regional liquidity arrangements to manage short-term volatility and liquidity risks.
Mobilising finance through regional infrastructure funds, blended finance and concessional loans could further de-risk projects and crowd-in private capital, it noted.
As per the paper, intra-regional trade of Asia has increased by 43% over the past four decades, and today, more than half of Asia’s trade occurs within the region. Regional cooperation is being institutionalized through frameworks such as the Asia-Pacific Trade Agreement, the Association of Southeast Asian Nations, and the Asia-Pacific Economic Cooperation.
“Harmonising standards and conformity assessment procedures under regional agreements could lower transaction costs and improve predictability. Furthermore, creating regional finance mechanisms and blended instruments could de-risk private investment and expand working capital for smaller firms,” it said.
Suggesting countries to build cooperative arrangements for strategic stockpiles, rapid response and information sharing to manage shocks, it said that development depends on the level of political commitment, stronger public-private collaboration and measurable targets for supplier diversification ensuring supply chains are efficient, inclusive and resilient.
“Countries in Asia Pacific needs to modernise port operations and customs technologies…and expand digital infrastructure such as high-capacity broadband, cloud services and secure cross border data exchanges to enable electronic trade documentation and real time tracking,” it said.
Expanding regional power trading, grid interconnections and integrated dispatch arrangements would allow abundant solar, wind and hydropower to serve demand centres more efficiently and reduce reliance on fossil fuel imports.
Citing the use of the Indian Rupee in trade settlements and its line of credit to the Maldives, the bank said that local-currency initiatives can serve as catalysts for regional integration and economic stability.
It also pushed for interoperable digital systems for trade documentation, traceability, interoperable transport networks that link ports, railways and inland logistics hubs to reduce transit times and lower costs.
“Creating interoperable payment systems and linking domestic real-time gross settlement (RTGS) and fast-payment networks will be critical to enable seamless cross-border settlements in local currencies,” India Exim Bank said in a working paper, adding that central banks can play a coordinating role by establishing bilateral swap lines and regional liquidity arrangements to manage short-term volatility and liquidity risks.
Mobilising finance through regional infrastructure funds, blended finance and concessional loans could further de-risk projects and crowd-in private capital, it noted.
As per the paper, intra-regional trade of Asia has increased by 43% over the past four decades, and today, more than half of Asia’s trade occurs within the region. Regional cooperation is being institutionalized through frameworks such as the Asia-Pacific Trade Agreement, the Association of Southeast Asian Nations, and the Asia-Pacific Economic Cooperation.
“Harmonising standards and conformity assessment procedures under regional agreements could lower transaction costs and improve predictability. Furthermore, creating regional finance mechanisms and blended instruments could de-risk private investment and expand working capital for smaller firms,” it said.
Suggesting countries to build cooperative arrangements for strategic stockpiles, rapid response and information sharing to manage shocks, it said that development depends on the level of political commitment, stronger public-private collaboration and measurable targets for supplier diversification ensuring supply chains are efficient, inclusive and resilient.
“Countries in Asia Pacific needs to modernise port operations and customs technologies…and expand digital infrastructure such as high-capacity broadband, cloud services and secure cross border data exchanges to enable electronic trade documentation and real time tracking,” it said.
Expanding regional power trading, grid interconnections and integrated dispatch arrangements would allow abundant solar, wind and hydropower to serve demand centres more efficiently and reduce reliance on fossil fuel imports.
