India is not actively pursuing an alternative to the U.S. dollar, according to Chief Economic Advisor (CEA) V. Anantha Nageswaran. Nageswaran refuted speculations that India was joining any efforts to create an alternative currency to the dollar. He made these remarks at an AIMA event on September 10, 2025, emphasizing that no such move is under consideration.
Nageswaran highlighted India's strong economic standing, noting a 7.8% GDP expansion in the first quarter of the fiscal year 2026. This growth is attributed to increased economic activity rather than subdued inflation. He also pointed out that the Indian economy is well-positioned to handle global trade uncertainties. Despite tariff disputes and geopolitical tensions, India's economy remains robust.
Nageswaran credited a decade of reforms for the economy's resilience, combining digital and physical infrastructure upgrades with the formalization of small and medium enterprises. He stressed that future reforms would require joint efforts from the government and private sector. He urged businesses to prioritize innovation and efficiency over protectionist measures, advocating for enlarging the economic pie rather than redistributing it. Nageswaran also noted that India's young workforce needs meaningful opportunities in a rapidly digitizing economy, requiring policymakers and industry leaders to balance technology adoption and job creation.
The Indian Rupee has recently fallen to a record low against the dollar, but the Finance Minister Nirmala Sitharaman stated that the government is closely monitoring exchange rates, noting that many currencies have weakened against the dollar. While the rupee's slide is primarily against the dollar, it is not a unique situation, as several global currencies have also depreciated against the U.S. currency.
India's total exports (merchandise and services combined) rose to Rs. 18,12,031 crore (US$ 210.31 billion) in April-June 2025, a growth of 5.94% YoY, reflecting resilience despite global trade disruptions. Services exports in June 2025 were estimated at Rs. 2,82,949 crore (US$ 32.84 billion), up from Rs. 2,47,021 crore (US$ 28.67 billion) in June 2024, contributing to a reduced overall trade deficit.
While not seeking to replace the dollar, the Reserve Bank of India (RBI) recognizes the importance of diversifying foreign exchange reserves to manage risks from global conflicts and financial shocks. Currently, a significant portion of India's reserves is held in dollar assets, particularly U.S. Treasuries. The RBI is gradually rebalancing its holdings to reduce concentration risk and is also encouraging the use of the rupee in international trade, especially within the Asian Clearing Union.
Despite some BRICS nations pushing for alternatives to the U.S. dollar, India has maintained that it has no intention of undermining the dollar's role. Some BRICS members have been advocating for trade settlements in national currencies. However, India's External Affairs Minister has stated that there is no unified BRICS position on de-dollarization, and India supports cautious diversification, including holding more gold reserves.
The United States' decision to increase tariffs on select Indian goods has impacted certain export sectors. However, a weaker rupee and the Goods and Services Tax (GST) reforms have cushioned the impact by making Indian goods more competitive and supporting domestic demand. CEA Nageswaran has acknowledged that while the economic impact of U.S. tariffs will be significant, it should be manageable in the short term. He also indicated that India is exploring ways to attract investments, including from Chinese companies, in sectors where it currently relies on imports.
