- BRICS has discussed launching a new currency to reduce reliance on the U.S. dollar for over three years.
- The idea of a common BRICS currency was not addressed at the bloc’s recent summit in Rio de Janeiro.
- India stands firmly against both the formation of a BRICS currency and broader efforts to de-dollarize trade.
- Indian officials warn that a BRICS currency could give China greater economic power and negatively impact India’s U.S.-dollar-based industries.
- India continues to support using the U.S. dollar in international transactions, especially within its key IT and service sectors.
The BRICS alliance, which brings together several major emerging economies, has been exploring the possibility of creating a shared currency for more than three years. Most bloc members see this potential currency as a tool to challenge the global dominance of the U.S. dollar. However, talks on the subject stalled at the latest BRICS summit in Rio de Janeiro, and the group postponed further discussion.
According to official statements, India holds a $3.9 trillion gross domestic product and remains openly skeptical about the proposed currency. The country has made repeated public comments resisting both the common BRICS currency and the group’s broader push for currency diversification away from the U.S. dollar. Instead, India has opted to continue its support for dollar-based trade arrangements.
Despite India being an original BRICS member, government officials have clarified that India does not back the bloc’s de-dollarization agenda. External Affairs Minister S. Jaishankar stated that India is not participating in BRICS efforts to reduce dependence on the U.S. dollar, instead choosing to focus on expanding trade using local currencies where possible (source).
Indian officials believe that a BRICS currency could benefit China disproportionately because of its major export sector and economic influence. India’s IT and services industries depend heavily on transactions in U.S. dollars, particularly in dealings with American companies. “If they move away from the U.S. dollar, the IT sector in India will be largely hit,” the article states.
Looking back, the concept of a new BRICS currency has stalled due to these internal divisions. Officials argue that current dollar arrangements benefit India’s economy, especially in sectors with strong links to global markets. The country maintains its stance, emphasizing the risks of shifting away from the established system.
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