India’s Pragmatic Stance: Why BRICS Currency and De-Dollarisation Don’t Fit Its Strategic Goals

BRICS & India – Key Points in Simple Form

1. Trump’s Statement & Reality

• Trump called BRICS “anti-American” and threatened up to 10% tariffs if it built an alternative to the US-led system.
• This reflects fear more than fact — BRICS is not inherently against the US.

2. BRICS Composition & Purpose

• Now, 11 members: Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the UAE, Ethiopia, Indonesia, and Iran.
• 45% of the world population, ~35% of GDP.
• Seeks a fairer global order, especially for the Global South, not to weaken the US.

3. Western Anxiety

• Concern mainly over BRICS’ talk of financial reform and reducing dollar dependence.
• Brazilian president’s 2023 idea of a BRICS currency had no consensus.

4. Why a BRICS Currency is Hard

• Members are diverse in terms of their political, economic, and geographical backgrounds.
• Some have tense relations (e.g., India–China).
• No common market, fiscal authority, or free trade network like the Eurozone.

5. Current Financial Cooperation

• BRICS Pay launched in 2018 to reduce reliance on SWIFT — still small in scale.
• India’s stance:
  • Not for de-dollarisation.
  • No proposal for a BRICS currency (Jaishankar, 2024).
  • Local currency trade is for risk control, not replacing the dollar.

6. Currency Peg Issues for India

• Likely pegged to the yuan, rouble, or dirham (more liquid globally than the rupee).
• This could reduce rupee’s value, raise trade costs, and limit monetary control.

7. Trade Pattern Limits

• Much of India’s trade is with non-BRICS countries.
• BRICS currencies would have limited use; the dollar remains more practical.

8. Risk of Dependence

• Pegging to yuan/rouble increases dependence on China/Russia.
• Could give them greater economic influence over India.

9. Threat to Monetary Sovereignty

• Common currency needs aligned macroeconomic policies — unlikely.
• India prefers policy independence to control inflation & growth.

10. India’s Balanced Approach

• Uses local currencies in limited cases (e.g., countries with dollar shortages).
• Focus is reforming IMF/World Bank for more Global South representation.
• BRICS role: push fairness, not replace the dollar.

11. Volatility Risks

• Yuan, rouble, dirham have external vulnerabilities (sanctions, capital controls, oil prices).
• Dollar is still more stable and predictable.

12. Areas for Safe Cooperation

• Cross-border digital payments.
• Financial transparency.
• Lower transaction costs in South-South trade.
• These don’t require a single currency.

13. Strategic Caution

• India avoids deep currency ties with China/Russia.
• No major local currency trade deals even with them — shows hesitation.

14. US Tariff Threats

• May grab headlines but unlikely to stop multipolar economic trends.
• Could hurt US exporters more than partners.

Conclusion

• BRICS is a diplomatic platform for India to represent the Global South.
• India’s priority:
  • Keep strategic autonomy.
  • Maintain monetary flexibility.
  • Reform existing institutions, not create risky new currencies.
• De-dollarisation and BRICS currency offer little benefit for India now.

Author: Master Vikrant RohinMaster Vikrant Rohin is an international author, and more than four countries’ schools are using his books in the core curriculum of education. He is the author of twenty different subject books. History, Economics, Chemistry, Physics, English, Biology, Geography etc. Most of his students hold high-ranking positions in the public and private sectors. He has cracked the world’s toughest exam, the "Civil Services Examination (UPSC)," eight times. Always a topper in academics, he was also a top-class sportsman, a state boxer, and a basketball player.