De-Dollarisation Campaign: India, Russia, China Tighten Grip Aganst USD – Will The Currency Survive? | World News
De-dollarization: Russian President Vladimir Putin arrived in the city on December 4 for a two-day visit to India, his first since the start of the Ukraine war. The trip highlights Moscow’s efforts to strengthen ties beyond China and explore strategic economic and financial cooperation with India, particularly in promoting trade in local currencies and reducing dependence on the US dollar.
All three countries (India, Russia and China) are key members of the BRICS, and each has long encouraged trade in local currencies rather than the US dollar.
Analysts suggest that talks during Putin’s visit about using local currencies in bilateral trade could deepen cooperation and even explore the potential of a common BRICS currency, a plan that has already received support from China.
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The push for a common alternative was made clear at the BRICS Summit in Kazan, Russia, in November 2024. Putin displayed a prototype of a potential common currency on stage, emphasizing that the goal is not to abandon the US dollar altogether but to create alternative financial systems for transactions between member countries and their global partners.
“We are not denying the dollar or fighting it. But if it does not allow us to operate freely, we must explore other options,” he said.
The proposed BRICS currency aims to increase economic independence while competing with the current global financial system dominated by the US dollar.
Currently, almost 89% of international foreign exchange transactions are settled in dollars, and historically almost all oil transactions were settled in US dollars. However, in 2023, approximately one-fifth of oil trade took place in currencies other than the dollar.
Understanding De-dollarization
De-dollarization involves reducing dependence on the US dollar by conducting international trade in local currencies, reducing demand for the dollar globally, strengthening fiscal autonomy among BRICS countries, and mitigating the impact of US policies and global market volatility.
Next year India will host the BRICS summit. Financial experts predict that this event will strengthen the alliance of India, Russia and China against the dollar.
Prime Minister Narendra Modi, President Putin and Prime Minister Xi Jinping recently shared a platform at the SCO Summit in Tianjin; This meeting reportedly disturbed former US President Donald Trump.
India-Russia Trade Already Leading the Way
Russian Deputy Prime Minister Denis Manturov had said in November 2024 that around 90% of India-Russia trade now takes place in local or alternative currencies. Addressing the 25th session of the India-Russia Intergovernmental Commission on trade, economic, scientific, technology and cultural cooperation, he had said, “The share of local and alternative currencies in bilateral trade is increasing, now approaching 90%. Expanding correspondent banking relations between Russian and Indian banks remains a priority.”
India took its first concrete step in July 2022, when the Reserve Bank of India allowed international commercial invoicing and payments to be made in rupees. Around 20 authorized dealer banks in India have been allowed to open 92 special rupee vostro accounts with partner banks in over 22 countries to facilitate these transactions.
Countries opening rupee accounts in India include Bangladesh, Belarus, Botswana, Fiji, Guyana, Israel, Kazakhstan, Kenya, Malaysia, Maldives, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Sri Lanka, Tanzania and Uganda.
Why Do BRICS Want a Common Currency?
BRICS countries face increasing financial challenges and aggressive US foreign policies; Therefore, they want to protect their economic interests.
A new BRICS currency could reduce dependence on the US dollar and euro, minimize the impact of unilateral sanctions, make cross-border transactions smoother, promote regional currency alliances and strengthen economic integration among member countries.
Renowned geopolitics expert Dr. Brahmchelani said in a social media post: “Putin’s visit to India on December 4-5 is more than a diplomatic break. It sends a strong geopolitical signal. We may see agreements to bypass the SWIFT system and create alternative payment channels designed to challenge the dominance of the US dollar.”
Global Context and US Response
While the US dollar remains the dominant reserve currency, its share has gradually decreased with the rise of the euro, yen, pound and yuan. President Donald Trump’s tariff policies, which initially targeted China and later affected India, highlight Washington’s protectionist approach.
Therefore, BRICS countries are increasingly exploring currency alternatives to reduce dependence on the dollar.
India-Russia Trade Prospects
Minister of Foreign Affairs Dr. S. Jaishankar has estimated that bilateral trade between India and Russia could exceed $100 billion by 2030. Speaking at the India-Russia Business Forum in Mumbai recently, he said, “Our current bilateral trade stands at $66 billion, which makes the target of $100 billion by 2030 both realistic and achievable.” he said.
The world is watching closely as Putin sets foot in New Delhi. Debates over local currency trade, BRICS integration and alternatives to the dollar could influence global financial dynamics in the coming years.
