India has expressed confidence that the trend of trading in national currencies would continue to expand globally in spite of warnings by US President Donald Trump, who has on several occasions threatened to impose 100-150% tariffs on BRICS nations should they attempt "de-dollarisation".
Addressing a media briefing at the Ministry of External Affairs (MEA) in New Delhi on Monday, Secretary (Economic Relations) Dammu Ravi categorically rejected the idea that the push to expand settlement in national currencies had anything to do with de-dollarisation.
"Countries in the Global South are also looking for alternatives. Again, it is not a de-dollarisation issue. Countries are also doing trade settlement in national currencies. This has been going on for quite some time. What's happening in the BRICS is precisely that. We are trying to develop some understanding on how important it is to have alternative mechanisms, to be able to trade in national currencies and also do projects in national currencies," the senior Indian diplomat underscored.
Ravi said that not only the governments and the central banks, but even the businesses of the Global South nations should "plug in" to the idea.
"So, that's the process and we are confident that it will find traction in days to come," he said.
Further, Ravi noted that many countries in the Global South were already carrying out trade in national currencies, whether as part of BRICS or in a bilateral context.
"And why is this happening? We have to understand that there is a geopolitical context and there is an economic angle. Countries of the Global South become vulnerable when there are problems elsewhere in the world. And that is why the alternative format and the methods countries in the Global South want to use are very natural," the Secretary said.
Further, he emphasised that India has already been putting in place a framework to carry out trade settlement in Indian Rupees (INR) with many countries across the world (nearly two dozen nations). He said that many BRICS nations were already undertaking efforts to device mechanisms to carry out trade in their own currencies.
"But, the idea of whether the national currencies is negating US Dollar (USD) utilisation in the world, I don't think that we have to get into that debate of USD vs national currencies," Ravi explained. "I don't think there's a competition there. It is just that countries will keep looking for alternatives and we have to appreciate their effort in that direction."
Further the Indian diplomat stated that Prime Minister Narendra Modi's visit is an excellent opportunity to reiterate India's solidarity, commitment with issues of the Global South, which require greater understanding and deliberations at an international level.
"In all the countries he would visit, there would be a reiteration of the commitment to the Global South issues," he added.
Ravi said that PM Modi's deliberations during the upcoming five-nation visit and his engagements at the BRICS Summit in Rio De Janeiro (6-7 July) would focus on reform of the multilateral system, climate financing, ethical use of Artificial Intelligence (AI) and sharing experiences of India's low-cost solutions, including digital public infrastructure (DPI), among others.
The Indian diplomat stated that four "deliverables" were expected at the 17th BRICS Summit- a Leaders' Declaration, a Leaders' Statement on Global Governance and AI, a Leaders' Framework Declaration on Climate Finance and a BRICS Declaration on the Elimination of Socially Determined Diseases and Infections (SDD).