The SCO 2024 summit is showcasing India’s growing discontent with China and its advancement of pushing the Chinese yuan for trade settlements and not the US dollar. The first dilemma came when India’s Prime Minister Narendra Modi decided to skip attending the SCO 2024 summit in Kazakhstan. India’s Foreign Minister S Jaishankar is at the event with a delegation.
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China is advancing the de-dollarization agenda at the two-day SCO 2024 summit. Its counterpart Russia is also puppeting China’s stance to use local currencies for trade and not the US dollar. Russia wants buyers for its crude oil to pay either in the Chinese yuan or Russian ruble. Both countries want to convince SCO members to trade in local currencies and sideline the US dollar.
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India is unhappy with the push as the country is disinterested in using the Chinese yuan for payments. The Modi administration is focused on using the US dollar and wants to avoid the Chinese yuan. Read here to know how many sectors in the US will be affected if SCO ditches the dollar for trade.
SCO 2024 Summit: India Reluctant on Using Chinese Yuan, Prefers US Dollar
India saved $7 billion in exchange rates by paying the Chinese yuan and Russian ruble for oil from Russia in 2022. The demand from Russia to settle every crude oil shipment in Chinese yuan did not go down well with India. That is when India began ditching Russian oil and procuring oil from the US paying in dollars. India fears that China is using the SCO 2024 summit just to advance its de-dollarization agenda and strengthen its economy.
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The reluctance also dates back to history as India and China have been at loggerheads for five decades. The Modi government will be seen as weak by its citizens if they bow to the Chinese demands. In conclusion, one thing clear at the SCO 2024 summit is that India wants the US dollar and not the Chinese yuan for trade.