India has reiterated that de-dollarisation is not part of its financial agenda within the BRICS economic alliance, instead focusing on promoting trade in local currencies. This stance was reaffirmed amidst discussions about a potential BRICS trade currency and rising trade tensions with the United States.
The Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal stated that de-dollarisation is not on India's financial agenda. This statement follows suggestions from Brazilian President Luiz Inacio Lula da Silva that BRICS nations should explore a trade currency. Lula said the concept should be tested.
India has been promoting the use of local currencies and rupee internationalisation through bilateral agreements. This approach aims to enhance trade resilience while maintaining economic flexibility, with no plans for a unified BRICS currency. External Affairs Minister S. Jaishankar had stated in October 2024 that India has never been in favor of de-dollarisation and that there is no proposal for a BRICS currency.
India's position involves using local currencies in trade as a risk management tool rather than a move towards de-dollarisation. While India engages with BRICS countries on areas of shared interest, it is committed to safeguarding its economic and strategic priorities.
The BRICS alliance, originally composed of Brazil, Russia, India, China, and South Africa, has expanded to include Iran, the United Arab Emirates, Ethiopia, and Egypt. Within the BRICS framework, India has favored bilateral and limited local currency trade mechanisms, especially with countries facing dollar shortages. These arrangements are designed to sustain trade momentum in the short term without challenging the dollar’s overall dominance.
Several factors contribute to India's cautious approach. A hypothetical BRICS currency would face technical challenges, particularly in determining its value. The Indian rupee is relatively under-internationalized, which would limit its role in influencing the value of a BRICS currency. If the currency were pegged to stronger currencies like the Chinese yuan or Russian ruble, it could diminish the relative value of the rupee, weakening India's monetary leverage and raising the cost of external transactions.
Moreover, a significant portion of India's trade lies outside the BRICS bloc, making a BRICS currency an inefficient substitute for the U.S. dollar in those transactions.
Former Reserve Bank of India Governor Shaktikanta Das described the use of local currencies in trade as a risk-management tool rather than a genuine push toward de-dollarisation.
Despite not pursuing a shared BRICS currency, India is promoting trade in its local currency. Other countries, including Russia, Malaysia, Kenya, Sri Lanka, and Bangladesh, have also agreed to facilitate trade in rupees. External Affairs Minister Jaishankar Subramanian has stated that moving away from the U.S. currency is not part of New Delhi's economic policy.
India is actively exploring alternatives to the U.S. dollar for international trade and is considering interoperable payment systems to connect BRICS markets. A cross-border payment model is already active in Bhutan, UAE, Singapore, and other countries, promising speed and lower costs. Creating an independent settlement and depository system on the BRICS platform could also make currency transactions faster, more efficient, and safer.
