India Bucks BRICS: Modi Government Snubs Dedollarization Push

Another crack in the BRICS alliance as India digs in its heels—while China pushes for a dollar-free future, New Delhi won’t play ball. The rupee stays dollar-pegged, and gold reserves keep stacking. Meanwhile, BRICS’ ’anti-dollar’ rhetoric starts looking like another underfunded multilateral pipe dream—just ask the IMF’s coffee fund.

Behind closed doors: India’s central bank governor cites ’liquidity risks’ and ’export pressures’ for staying dollarized. Translation: We’ve seen how stablecoins collapse—why gamble on BRICS Coin?

The fallout? Crypto markets barely blinked—Bitcoin holds $70K as traders yawn at geopolitical theater. After all, when was the last time a central bank consortium moved faster than a DeFi protocol’s governance vote?

In Brief

• India categorically rejects the dedollarization efforts promoted by the BRICS and the Global South.
• This refusal contrasts with the positions of Russia and China, which actively advocate for alternatives to the dollar-based system.
• Several economic and diplomatic reasons explain India’s position, including its significant dollar reserves and ties with the United States.
• This break could have major repercussions on the monetary ambitions of the Global South and the future of the international financial order.

India breaks away from the dedollarization project

The Indian government caught everyone off guard by explicitly stating that it WOULD not support the dedollarization efforts led by some influential BRICS members. Indeed, India has absolutely no interest in dedollarization nor in any initiative aiming to undermine the US dollar.

This clear and unambiguous stance strongly contrasts with the discourse promoted for months by countries like Russia and China, which actively advocate for the gradual abandonment of the dollar in international trade in favor of their own currencies or a potential common BRICS currency.

Such a position reflects a strategic choice driven by several major economic and diplomatic considerations:

• Significant dollar reserves : India holds a substantial portion of its foreign exchange reserves in USD, which it considers a guarantee of financial stability ;
• Trade relations with the United States : economic ties with Washington are crucial for New Delhi, especially in the tech, energy, and defense sectors ;
• Concern for macroeconomic stability : Indian authorities fear that a shift to an alternative system would cause monetary instability that’s difficult to control ;
• No immediate benefits : unlike sanctioned Russia or China seeking leadership, India has no direct gain from breaking away from the dollar-based system.

This categorical refusal thus highlights India’s desire to maintain a financial trajectory independent of geopolitical tensions between blocs, even within an alliance like the BRICS.

BRICS unity fractured : monetary tensions in the Global South

While India reaffirms its support for dollar hegemony, other BRICS members, particularly Russia and China, relentlessly pursue efforts to bypass Western monetary channels.

The dedollarization process is gaining momentum worldwide. This stance fits within a dynamic initiated after economic sanctions imposed on Russia, which has since strengthened its partnerships with countries willing to trade in rubles, yuan, or through alternative systems to SWIFT.

Beijing, for its part, continues to promote the internationalization of the yuan, notably by encouraging its trading partners to increase their reserves.

These initiatives, if they gain ground, however indicate a growing split within the BRICS. Moreover, the joint dedollarization agenda now appears compromised by the lack of consensus among its most influential members.

India, far from marginal in the group, represents an economy of considerable size and demographic weight. Its refusal to participate in monetary substitution mechanisms thus weakens the credibility of any potential common currency or alternative financial system. The divergences are deep. Thus, where Russia acts out of political necessity, and China out of geoeconomic ambition, India chooses prudence and stability.

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