India has taken significant steps towards reducing dependency on the US dollar in international trade, leveraging its economic strength and diplomatic acumen. By promoting trade in local currencies, India is not only safeguarding its economic interests but also reinforcing its position in the BRICS bloc (Brazil, Russia, India, China, and South Africa).

RBI’s Historic Decision to Trade in Rupees

In 2022, the Reserve Bank of India (RBI) made a landmark move by allowing international trade settlements in Indian Rupees. This step came in response to the Western sanctions on Russia during the Russia-Ukraine war. The primary goal was to secure India’s trade amidst geopolitical uncertainties, rather than directly challenge the dominance of the dollar.

Addressing the 2024 Kazan BRICS Summit, PM Narendra Modi emphasized, “Encouraging trade in local currencies will strengthen economic cooperation among BRICS nations.” This reflects India’s strategic intent to reshape global trade dynamics while protecting its own interests.

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