In a fresh threat to the fast-growing BRICS coalition, which now includes 10 nations and was originally represented by Brazil, Russia, India, China, and South Africa, US President Donald Trump said in a social media post that any country aligning itself with the “anti-American policies” of BRICS would face an additional 10 per cent tariff. Trump had threatened BRICS nations of a 100 per cent tariff “if they so much as even think” about reducing the use of the dollar in global trade.
Ever since the US weaponised the global financial infrastructure by excluding Iran (in 2012) and Russia (in 2022) from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), countries around the world have sought to reduce their dependence on the US dollar and the US-led global financial system. Most notably, Russia and China began trading in domestic currency.
BRICS now accounts for 45 per cent of the global population and contributes over 35 per cent to the world’s GDP. At their summit held in Kazan, Russia, in October 2024, the founding five members—Brazil, Russia, India, China, and South Africa—formally admitted Egypt, Ethiopia, Iran, and the United Arab Emirates as new members. Indonesia joined the grouping later in January 2025, bringing the total membership to ten.
In June 2022, Russia proposed the creation of a new international reserve currency based on a basket of currencies from BRICS countries. However, according to a BRICS report, member nations said they “do not seek to replace the US dollar as a medium of exchange”. Instead, BRICS aims to “offer a viable alternative that will aid the market in its perpetual mission for efficiency” and foster greater prosperity, promoting universally beneficial and inclusive economic globalisation.
Trump’s threat coincides with the US dollar hitting a three-year low this year, after declining by over 10 per cent against a basket of currencies such as the euro and yen, due to expected disruptions in the US economy stemming from proposed tariffs.India’s position and dealings in BRICS
In October 2024, External Affairs Minister S Jaishankar clarified that while US policies often complicate trade with certain countries, and India sought “workarounds” in pursuit of its trade interests, it did not “target” the dollar or seek to move away from it.
“We have never actively targeted the dollar. That’s not part of our economic, political, or strategic policy. Some others may have done so. What I will say is that we have a natural concern. We often have trade partners who lack dollars for transactions. So, we must decide whether to forgo dealings with them or find alternative settlements that work. There’s no malicious intent towards the dollar,” Jaishankar said in response to a question at the Carnegie Endowment for International Peace, an American think tank in Washington DC.
In December 2024, then RBI Governor Shaktikanta Das had said India was not pursuing “de-dollarisation”, and that recent measures such as allowing Vostro accounts and entering local currency trade agreements were intended to only “de-risk” Indian trade.
While BRICS nations have discussed the possibility of a shared currency, they have reached no decision, Das said.
“This is not about de-dollarisation; it is about de-risking our trade,” Das said. “The geographical spread of BRICS nations is a factor to consider. Unlike the Eurozone, with its geographical contiguity enabling a single currency, BRICS countries are spread across diverse regions, posing unique challenges,” he said.
De-dollarisation not in India’s interestA key reason why India is not backing de-dollarisation is the rise of the Chinese yuan as a challenger to the US dollar. India has resisted using the yuan for Russian oil imports, even as the currency’s acceptance grows in Russia.
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Following Western sanctions on Russia, including the freezing of $300 billion in Russian foreign holdings, the yuan has become Russia’s most traded currency. According to the Russian government, more than 90 per cent of trade settlement between the two countries is now conducted in roubles.
Ajay Sahai, Director General & CEO of the Federation of Indian Export Organisations (FIEO), the country’s top trade promotion body, told The Indian Express earlier that while supporting local currency initiatives, India should ensure the framework does not disproportionately favour China, given the asymmetry in economic power among BRICS nations.
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