India has drawn a clear line in the sand on the BRICS stage, distancing itself from calls to replace the US dollar in global trade. While some member nations have floated the idea of a joint BRICS currency, New Delhi has firmly stated that de-dollarisation is not part of its financial agenda. Instead, India is sharpening focus on a strategy closer to home, expanding trade in local currencies with partner nations and pushing the rupee onto the world stage.
India’s Stand on De-Dollarisation
The government has reaffirmed that India is not working towards reducing dependence on the dollar in a confrontational sense. Rather than championing an alternative bloc currency, India is promoting practical measures to encourage the use of local currencies in cross-border trade. This approach, officials argue, provides flexibility and respects the economic systems of individual countries, unlike the complexities of a common BRICS currency.
Bilateral Deals over Bloc Currency
While Brazil has publicly suggested the idea of a single BRICS trade currency, India has taken a different route. New Delhi has already signed agreements with countries such as the United Arab Emirates and the Maldives to enable trade settlements directly in rupees. The Reserve Bank of India is also steadily creating a framework for the rupee’s internationalisation, opening new avenues for its use in global markets.
RBI Circular on Rupee Trade
In a significant move, the RBI recently allowed 100 percent settlement of international trade in rupees through Vostro accounts. Earlier, such accounts required prior approval, but the new policy simplifies the process and makes it easier for trading partners to accept rupee payments. This step signals India’s ambition to offer the rupee as a reliable settlement currency in a multipolar trading system.
Strategy of Flexibility
India’s push is not about dismantling the dollar’s dominance but about diversifying options for global trade. By encouraging local currency settlements, New Delhi is helping reduce reliance on third-party currencies like the dollar or the euro in regional trade. The idea is to give businesses and partner countries more flexibility while also expanding the rupee’s global presence.
Why It Matters
The debate over de-dollarisation is gaining attention as geopolitical shifts and sanctions expose vulnerabilities in dollar-denominated trade. Yet India’s approach stands out as cautious and pragmatic. Rather than rushing into experiments like a BRICS currency, India is quietly laying the groundwork for the rupee to gain international credibility.
Looking Ahead
For India, the road forward is clear. De-dollarisation may be an appealing slogan for some nations, but India is more interested in building trust around its own currency. By gradually expanding rupee-denominated trade, the country is working towards a larger ambition: making the rupee a reference point in international commerce without disrupting the existing global order.
