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Erosion of Western Financial Hegemony is in India’s National Interest, RSS Affiliate Says

© Sputnik / Nina ZotinaDollar banknotes
Dollar banknotes - Sputnik India, 1920, 13.05.2023
India has largely circumvented the Western sanctions against Russia and significantly expanded its economic ties with Moscow since last year, largely thanks to trade in crude oil. At present Russia ranks among India’s five biggest trade partners and the biggest energy supplier.
Ashwani Mahajan, the co-convenor of the Indian economic advocacy group Swadeshi Jagaran Manch (SJM), an affiliate of the Rashtriya Swayamsevak Sangh (RSS), has said the ongoing push towards trading in national currencies by India is in the country’s “national interest”.

“The US dollar has become a weapon for some countries. It has contributed to rising trade deficit, contributed to inflation and made us dependent on Foreign Direct Investment (FDI) and Foreign Portfolio Investors (FPIs) for the wellbeing of the domestic economy and market,” Mahajan told Sputnik in an exclusive interview.

Mahajan, an economics professor at Delhi University, underlined that the depreciation of other currencies against the US dollar was another major cause of worry for developing nations.
He recalled that in the Sixties, the rate of exchange was five rupees to the dollar - 16 times more valuable than the 80 rupees for a dollar it is at present.
Mahajan said that the predominance of the US dollar in international trade has been particularly worrying for India and other developing nations at times of economic crisis such as is being experienced at present, in the wake of G7 nations’ sanctions against Moscow.
“At times, certain countries have faced a paucity of US dollars which has affected importing ability,” stated Mahajan.
He further noted that India has been a “victim” of Western sanctions in the past, as it was forced to recalibrate its economic ties after Washington introduced sanctions against countries such as Iran.
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PM Modi Has Been ‘Emphatic’ in His Economic Policy, Mahajan Says

Mahajan praised steps taken by Prime Minister Narendra Modi in recent years, which he said have directly contributed to erosion of the Western financial hegemony.
He noted that New Delhi has been in talks with nearly 19 countries to trade in national currencies, adding that the Reserve Bank of India (RBI) last year also allowed the opening of special ‘Vostro’ accounts to expedite the de-dollarization process.

“Prime Minister Modi has been energetic in highlighting the Indian national interest. The trade in national currencies is an effective way to circumvent Western sanctions and erode the West's financial hegemony,” Mahajan said.

More Russian FPIs Will Help to Stabilise Indian Stock Market

Mahajan also “welcomed” the entry of Russian foreign portfolio investors (FPIs) into the Indian capital market, saying that having a “diversified” pool of investors will decrease volatility in the market.
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India’s market regulator, the Securities and Exchange Board of India (SEBI), this month approved the registration of three Russian portfolio investors, including Alfa Capital Management Company.
This marks the entry of Russian investors into the Indian market through the FPI route.

“The problem with European, Japanese and other FPIs have been that they have quit the Indian market affected by economic developments in their domestic markets. These fly-by-night operations have contributed to stock market volatility,” Mahajan explained.

He added that the entry of more Russian and other non-Western FPIs would be a “win-win” situation for all the stakeholders, as India is expected to be among the fastest-growing major economies in the world.