Over the past years, the world financial situation has been characterized by the trend towards de-dollarization. An increasingly high number of countries are attempting to sever their trade ties with the US dollar. India is an important player in the global economy. The country has the highest pace of growth and, at the same time, is a founding member of the BRICS bloc of countries. The BRICS alliance has shown interest in abandoning the use of the USD. China is one of the founding BRICS members that has gone a far way in abandoning the dollar. India, on the other hand, has said that it does not intend to move away from the USD. Let’s understand how India has approached the anti-dollar sentiment so far.
India’s Stand On De-Dollarization
India has actively participated in the BRICS+ discussions on having a mutual currency for trade. Despite its participation, the country has publicly stated that it does not intend to undermine the US dollar. India believes the USD plays a key role in global stability.
While India does not intend to move away from the dollar, the country has made trade deals to use local currencies for trade with certain partners. India buys Russian oil using its rupee instead of the US dollar. The development took hold after Western countries placed sanctions on Russia for its invasion of Ukraine.
India has also signed agreements with Malaysia, Bangladesh, and the UAE to settle trade in rupees. This is another move from the country to promote soft de-dollarization. The nation has agreements with Bangladesh to allow $2 billion worth of exports to be settled in rupees. Similar agreements also exist with 18 other countries, including Germany and Singapore.
Also Read: De-Dollarization Necessary: Unveiling The Risks Of A Strong US Dollar
India’s movements suggest that the country does not want to undermine the US dollar, nor does it want to solely rely on the greenback. India has made efforts to boost ties with the US over the last few years. Pushing the dollar aside could prove counterproductive. India has also had a history of non-alignment. The nation has taken a self-first approach to several issues. India’s cautious approach to the anti-USD movement could pay off in time.