Following the continued de-dollarization efforts of the BRICS group, India and Russia have taken a major step to ditch the US dollar in trade. Both sides recently met for a landmark meeting earlier this year. Indeed, India’s Prime Minister Narendra Modi met with Russia’s President Vladimir Putin in Moscow in early July.
One of the meeting’s most important points was continued bilateral trade growth. The two sides have sought to increase cooperation in an important way. During the meeting earlier this summer, Putin called the relationship “one of a particularly privileged strategic partnership.”
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India and Russia Take Huge Step to Rid Trade of the US Dollar
Throughout this year, Russia has sought to continue establishing economic partners that will avoid trade in the US dollar. This pursuit has been largely successful. Its recent stance on crypto shifted over the last month, opening doors to trade deals with nations like El Salvador.
Now, one of its BRICS allies is set to continue that effort, as India and Russia have taken a major step to ditch the US dollar in trade. Specifically, Reuters reports that Indian central bank officials traveled to Moscow this week. The focus of the meeting was de-dollarization.
The officials reportedly discussed the creation of a “mechanism to expand local currency trade,” between both nations. The move would attempt to combat growing payment issues. Those are specifically tied to sanctions being placed on Russia following the Ukraine invasion in 2022.
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They are not the only trade partners struggling. A new report shows that 98% of Chinese banks are refusing Russian payments. All connected to issues derived from sanctions. Therefore, local currency trade is the only clear avenue out of the issue.
The meeting between India and Russia this week specifically targeted the greenback. Indeed, the two sides talked about “setting a reference rate between the two local currencies for trade instead of determining the value of currencies against the US dollar,” government sources said.
Russia has already become the second largest exporter to India. Behind China, Moscow saw its exports reach $23 billion in the first four months of the year in April. That figure is already an increase of 20% from a year prior.