NEW DELHI Automakers in India want to trade with African nations in rupees instead of dollars, in an attempt to boost exports to the continent, an auto industry body executive said on Thursday.
Africa, until last year, was the top importer of Indian-made vehicles, a position that now belongs to Latin America that receives 25 percent of India's auto exports.
Growth in total auto exports from India slowed to about 1.9 percent in the year to end-March compared with 15 percent growth in the previous 12-month period, due to falling sales to Africa.
Falling commodity prices have hit the economy of several African nations that are finding it challenging to make payments in dollars, said Sugato Sen, deputy director general at the Society of Indian Automobile Manufacturers (SIAM).
SIAM, which represents carmakers in India, will write to the ministry of commerce later this month seeking a shift from dollar to rupee for all trade with African countries, Sen said.
Sen said China has entered into a renminbi trade agreement with Nigeria to boost exports and if this extends to other African nations it could be a "serious threat" to Indian exports.
"If rupee trade is allowed we will be able to export more," he said.
A switch to trading in rupees would, if successful, reflect growing confidence in India's $2 trillion economy and its currency.
Inflation has halved in recent years to around 5 percent and the Reserve Bank of India has, under Governor Raghuram Rajan, amassed more than $300 billion in reserves to back the national currency.India's total bilateral trade with Africa was $57 billion in the year to end-March, including exports of $25 billion, government data showed.
Auto exports to the African continent fell 22 percent to $2 billion in the year to March 31 - their lowest level in four years, according to data from SIAM. Exports to Latin America grew 19 percent to $2.3 billion over the same period.
Maruti Suzuki India Ltd, Tata Motors, Hyundai Motor Co and Nissan Motor Co are the leading auto exporters from India.
(Additional reporting by Rajesh Kumar Singh; Editing by Douglas Busvine and Alexandra Hudson)
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Updated Date: Jun 09, 2016 20:49 PM