India rejects a shared currency for BRICS economies

India, a significant player in the BRICS group comprising Brazil, Russia, India, China, and South Africa, has made it clear that it does not support the idea of creating a shared currency among the group. Despite discussions about diversifying trade away from the U.S. dollar, analysts in New Delhi have emphasized that India is not interested in this initiative, particularly amidst cautions from U.S. President Donald Trump about potential consequences for nations considering a common currency. Trump articulated his viewpoint on social media, affirming that commitment from BRICS nations is needed to avoid adopting a new currency that could challenge the dollar’s supremacy. The BRICS bloc has recently expanded to include Iran, the UAE, Ethiopia, and Egypt, prompting concerns among Western nations regarding the implications of such diversification efforts. While countries like Russia and China have shown interest in reducing their reliance on the U.S. dollar, India's stance is distinctly focused on promoting trade in its local currency, the rupee. At a summit held in Kazan, Russia, BRICS leaders agreed to enhance local currency trade, which aligns with India’s foreign trade policy adopted last year. The new policy encourages using the rupee in trades with 17 identified nations, including Russia, Malaysia, Kenya, Sri Lanka, and Bangladesh. However, the practicality of this strategy poses challenges. India's trade deficit with Russia raises concerns about the accumulation of rupees that Russia may have difficulty utilizing. The situation highlights the complexities and limitations of India's bilateral trade strategies despite the intention to pivot away from the dollar. Indian External Affairs Minister Jaishankar Subramanian reiterated that moving away from the dollar is not a core aspect of India's economic policies, reflecting a cautious approach to altering the existing international trade framework. Furthermore, while the idea of a common BRICS currency is often discussed, it appears to be more symbolic, fraught with complexities that could undermine its viability. Comments from analysts indicate that the growing rhetoric from the U.S. adds a layer of caution to any potential currency discussions among BRICS members, as fears of trade tariffs loom large over any actions deemed anti-dollar by the U.S. government.