A highly automated, centralised treasury function is better equipped to withstand periods of crisis. With full visibility of and access to the company’s global cash, treasurers can respond more quickly in times of turbulence – for example, by strengthening liquidity buffers or making well-informed reallocation decisions.

It is therefore hardly surprising that, in light of the many geopolitical disruptions, we observe treasurers are once again focusing more closely on a familiar issue: how to deal with trapped cash.

Many companies earn high margins in fast-growing yet highly regulated markets in Asia-Pacific. However, capital controls and documentation requirements in these countries often prevent them from integrating this surplus liquidity into central cash management. In some markets, the direction is now shifting toward liberalisation.

Most notably, since early 2025, the Reserve Bank of India has allowed companies to hold accounts in Indian rupees (INR) abroad. They can use these funds to pay Indian and foreign suppliers, as well as to settle intra-group payments.

This offers many advantages, especially for companies that trade goods and services with their local subsidiaries: they can switch to the INR as an internal invoicing currency and thereby consolidate FX risk at group level. At the same time, treasury departments can integrate their Indian entities into the payment factory or the in-house bank and use them for intra-group netting. This increases efficiency and transparency in liquidity management, improves central treasury’s control over these payment flows, and enables greater flexibility in hedging currency risk.

“Integrating the Indian rupee into global liquidity management is likely to become more important”

Among our clients, German pharma and chemical company Merck KGaA was among the first to make use of this regulatory easing. As Jörg Bermüller, Head of Cash and Risk Management, puts it in the flow article Real-time treasury: Start small, go big: “For us, the cash disposition and hedging process for INR is now the same as for USD: money is automatically transferred to our in-house bank and sold via FX-All. Therefore, we don’t need to hedge with non-deliverable forwards (NDF) anymore. On top, we reduced hedging cost, centralised cash and automated reconciliation.”

So far, only a small number of European companies have opened offshore INR accounts. In the future, however, the option of integrating the Indian rupee into global liquidity management is likely to become more important for many treasury departments.

This is because in January 2026, the EU and India concluded a comprehensive free trade agreement. According to the agreement, tariffs on 96.6% of EU goods exports to the world’s most populous country are to be reduced or eliminated over the coming years –particularly for machinery, chemicals, car parts, and pharmaceuticals. The European Commission expects EU goods exports to India to double by 2032.¹

The subcontinent is already an important sales and sourcing market for German companies: bilateral trade volume reached a record value of €31.3bn in 2025.²

Thanks to the free trade agreement, the importance of the Indian market is now likely to continue rising – and with it, the significance of the Indian rupee for treasury.

India is not the only country making it easier for foreign companies to manage funds centrally: South Korea – also an important international market for German firms – is likewise easing the rules for so-called Registered Foreign Institutions (RFI) to access the domestic market. The aim is to open up the previously closed foreign exchange market, facilitate foreign investment, and make trading in Korean won (KRW) more competitive. Specifically, this enables treasurers to execute hedges in the deliverable won market –with benefits similar to those offered by the Indian rupee.

These two examples show that, in many regulated markets, it is possible to find ways to centralise payment flows and FX hedging. And treasurers can make the still-existing documentation requirements much more efficient with the help of their banks’ digital solutions. All of this contributes to improving control over local cash – and therefore to increasing resilience in treasury.

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Sources

¹ See EU and India agree on free trade agreement at germany.representation.ec.europa.eug
² See Strategic Partnership at gtai.de