Convertibility of rupee implies:

The correct option is: freely permitting the conversion of rupee to other currencies and vice versa.

Convertibility of a currency (like the Indian Rupee) is a concept in international finance and economics. It refers to the freedom of converting a domestic currency into a foreign currency (such as the US Dollar, Euro, or British Pound) and vice versa at market-determined or government-specified exchange rates without any restrictions.
This means that individuals, businesses, and investors can freely buy foreign currencies using rupees, or sell foreign currencies to obtain rupees, to facilitate international trade in goods and services, as well as financial investments.

Let's analyze why the other options do not accurately define currency convertibility:

1. Being able to convert rupee notes into gold: This refers to a "gold standard" or commodity-backed currency system, which is different from modern fiat currency convertibility.
2. Allowing the value of rupee to be fixed by market forces: This describes a "floating exchange rate system" rather than convertibility itself, though convertibility often operates under such a system.
3. Developing an international market for currencies in India: While convertibility helps in developing financial markets, it is not the definition of convertibility.

Therefore, convertibility of the rupee implies the liberty to convert the rupee into major foreign currencies and vice versa without administrative restrictions.