NEW DELHI: Passengers on international flights from and to India will soon be able to pay for merchandise or refreshments on board in rupees, as the government is considering a proposal to allow carriers flying into the country to bring in the local currency.

The Reserve Bank of India is in favour of enabling airlines to bring rupee notes representing the sale proceeds of merchandise on board international flights, a senior government official aware of the deliberations said. "We are reviewing the matter. There are some customs issues which may be resolved soon," said the official, who did not want to be named. Currently, airlines flying to India accept dollars and the currency of the country the flight is coming from. So, if a flight is between Delhi and Bangkok, airlines will accept either the dollar or the baht.

Airlines said allowing transactions in the Indian currency will benefit passengers. "This will be a good move and will benefit passengers, as we could not sell anything to a passenger with no foreign currency on him," said a SpiceJet executive on the condition of anonymity. Passengers used to complain a lot about not being able to pay in rupees, said another airline executive. "This (the move) should bring in respite to a lot of those passengers."

According to both executives, airlines have long been demanding a relaxation in this rule. The government official said the change in rule will follow the earlier relaxation provided by the RBI for Indian travellers to carry up to.`25,000 in and out of the country. Another senior official said the government was favorably considering the proposal.

While Indian nationals are currently allowed to carry .`25,000, foreigners can bring only up to .`10,000 beyond the customs area at airports. But foreigners are not allowed to fly with Indian rupees.