India dismisses the idea of a common BRICS currency, instead reaffirming its support for the US dollar as the primary global reserve currency. The announcement, made by Indian officials, marks a significant stance within the BRICS bloc, particularly as other member states push forward with de-dollarization efforts.
Speaking on the matter, India’s External Affairs Minister, S. Jaishankar, emphasized the country’s confidence in the current global financial system. “I don’t think there’s any policy on our part to replace the US dollar. As I said, at the end of the day, the dollar as the reserve currency is the source of international economic stability. And right now, what we want in the world is more economic stability, not less” Jaishankar stated.
This position aligns with India’s broader economic strategy, which focuses on maintaining stability in its financial sector and leveraging its growing partnerships with Western economies. Experts suggest that India’s reluctance stems from concerns over economic autonomy and its deep trade ties with the United States and European markets.
However, India’s stance presents a contrast to other BRICS members, particularly China and Russia, which have been vocal about the need to reduce dependency on the US dollar. Russia’s Finance Minister, Anton Siluanov, recently stated, “We see the de-dollarization of trade as a necessary step toward economic sovereignty. BRICS must explore alternative financial mechanisms to ensure a balanced global economy.”
China, the bloc’s largest economy, has been at the forefront of advocating for an alternative reserve currency. The Chinese government has actively promoted the internationalization of the yuan and expanded bilateral trade agreements that bypass the US dollar. “The global financial order is evolving, and BRICS should be a key driver in shaping a multipolar currency system,” said a senior official from the People’s Bank of China.
Despite India’s reservations, BRICS has continued to make strides in reducing reliance on the dollar. The New Development Bank has been expanding its lending in local currencies, and recent agreements between member states have included provisions for non-dollar trade settlements.
For Africa, which has strong economic ties with both China and India, this divergence within BRICS presents opportunities and challenges. While some African economies may benefit from continued dollar-based stability, others especially those closely aligned with China’s Belt and Road Initiative could be drawn toward alternative financial systems.
As BRICS prepares for its next summit, the debate over a common currency versus a diversified de-dollarization strategy is expected to be a focal point. Whether India’s stance will impact the bloc’s long-term financial direction remains to be seen, but its reaffirmation of the US dollar’s role signals a key division within the alliance. Only Russia, China, and Iran are aggressively looking to replace the US dollar for cross-border transactions.
