China and Russia are pushing the idea of a BRICS currency while India and Brazil are taking a step back. The upcoming tender is the talk of the town as the alliance is planning to launch it in the markets to take on the US dollar. Russian President Vladimir Putin displayed a mock-up bill at the summit last year, indicating that the plans for a new tender are active.
However, India is unhappy with the idea of a BRICS currency and wants to support the US dollar’s reign. It is the only member country that openly said that they do not support the de-dollarization agenda. The statements came after President Donald Trump warned of economic consequences if emerging economies distance themselves from the US dollar.
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Why Is India Worried About the Success of a BRICS Currency?
China has a grip over smaller nations of the alliance through the Belt and Road initiative. It has invested billions in infrastructural developments like railroads, ports, and airports. The success of a BRICS currency will only strengthen China in the Southeast region making India fall under its pragmatic approach.
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The stability of the Indian currency, the rupee will be hit giving China leeway to write trade policies as it pleases. India knows that China is using BRICS currency as a stepping stone to dominate the Southeast region. Trade between India and China has been asymmetrical due to border disputes and disagreements on the exchange of goods.
If the BRICS currency prevails, China will capture power in the Southeast region and tackle India with a stronger hand. The Modi government wants to contain China and not allow it to rise above its weight in the financial sector. The consequences are high and the largest democracy in the world wants to be connected with Western financial establishments. Containing the rise of the Communist country is key to maintaining balance in the Southeast region.
