The Reserve Bank of India Governor Sanjay Malhotra on Friday downplayed the importance of BRICS currency and supported the USD. He dismissed the launch of a BRICS currency in the near term, saying progress on the formation is not moving forward. He acknowledged that the US dollar is here to stay despite many developing countries’ unwillingness to settle payments in it.
“As of now, there is not much work happening on a BRICS currency,” Malhotra confirmed to The Times of India. He also stressed that the US dollar is a global dominant force and cannot be extinguished for financial cross-border transactions. “The dollar is here, as you are all aware,” he said.
The RBI Governor added that the USD will remain a force for a longer time as the BRICS currency might take decades to gain popularity. “It’s going to be here for some time, for a longish time, because you need some universal cross-border currency. It takes years, it takes decades for local currencies to gain, to become popular,” he said.
India Pushes BRICS Currency Aside, Sides With the USD
The remarks from India’s Central Bank Governor are a sharp criticism against those pursuing the de-dollarization agenda aggressively. It could be a veiled jibe against China and Russia for putting their local currencies ahead in the pretext of de-dollarization. India is pushing back against the BRICS currency and accepting the USD, as Trump plans to impose tariffs on the country.
However, India is open to the idea of settling trade in local currencies to strengthen their GDP and internationalize the rupee. This gives them a balance in the financial order, where the rupee is also gaining from trade policies. India wants to stop China from using BRICS as a stepping stone to further their Chinese yuan currency agenda. Therefore, they intend to use the rupee and the USD for trade and not rely on the BRICS currency and the Chinese yuan.
BRICS member India is shielding itself from Trump’s tariffs by projecting it has no plans to challenge the US dollar. India is seeking to dodge Trump’s tariffs after he threatened to impose duties on countries that move away from the USD. India is now stressing that it has no intentions of ditching the greenback for global trade and transactions, reported Bloomberg.
The move is to remain in the good books of Trump by not allowing him to impose tariffs on goods. Officials in New Delhi are closely monitoring the tariff changes and are informing the US authorities that they intend not to undermine the greenback. India, despite being a BRICS member since 2009 does not want to fall under Trump’s ambit of additional tariff policies.
Also Read: BRICS Omits De-Dollarization & New Currency at 2025 Summit
BRICS Member India Aims To Secure Trade Deals With the US
Trump followed on with his threats by slapping Brazil with 50% tariffs on Wednesday signaling that he’s serious. Also, the duties from Trump come just two-days after the BRICS 2025 summit where Brazil and India took center stage. Brazil’s President Lula da Silva lashed out at Trump for the tariffs saying that he “will not accept tutelage.”
“Trump is unhappy with some BRICS members (India) who have been talking about an alternate reserve currency,” said Mohan Kumar, an envoy at the World Trade Organization. “India has time and again differentiated between local currency trade and de-dollarization and therefore doesn’t fall in that category.” The Indian trade negotiators have put forward their best offer and now the Trump administration has to respond.
Also Read: No BRICS Currency Planned, Says Group’s Envoy
Vice President JD Vance also recently spoke highly of BRICS member India and appreciated its growing yet robust economy. The fate of the 21st Century “is going to be determined by the strength of the United States and India partnership,” he said, indicating that the two countries have to work together for the betterment of their economies.