Joining a BRICS currency initiative would undermine India’s global standing, economic independence, and democratic principles.
In a recent post on X, U.S. President-elect Donald Trump wrote, “The U.S. Dollar must remain the world’s reserve currency to maintain America’s strength and global stability. No country should join any anti-dollar conspiracy—it’s bad for the free world!”
This sentiment underscores a critical point: the proposal for a BRICS common currency directly challenges the global financial system’s stability. For India, the decision to engage in such a venture is fraught with risks, both economic and geopolitical, that far outweigh any potential benefits.
While the BRICS bloc has positioned itself as a counterbalance to Western dominance in global finance, the idea of a shared currency does not align with India’s strategic goals, its democratic ethos, or its economic interests. This essay explores why India should categorically reject the BRICS currency proposal and instead strengthen its partnership with the United States to lead the world toward liberty, prosperity, and stability.
Formed in 2006, BRICS is a coalition of the five major emerging economies: Brazil, Russia, India, China, and South Africa. Its stated goal is to promote a multipolar world by reducing reliance on Western financial systems and institutions like the International Monetary Fund (IMF) and World Bank. The bloc’s ambitions have grown, with discussions now centering on creating a common currency to reduce dependency on the U.S. dollar for international trade and reserves.
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A BRICS currency, if realized, could significantly impact global financial systems. Together, BRICS nations represent approximately 40% of the world’s population and contribute to nearly 25% of global GDP. The inclusion of nations like Egypt, UAE, Ethiopia, and Iran further amplifies the bloc’s footprint, increasing its potential to shift trade flows and challenge the dominance of the U.S. dollar.
Threat to the U.S. dollar
The BRICS currency proposal is seen as a direct challenge to the U.S. dollar’s role as the world’s reserve currency. This role underpins the global financial system, giving the U.S. unparalleled economic influence. A successful BRICS currency could:
- Reduce global reliance on the dollar for trade and reserves.
- Undermine the dollar’s dominance in key commodity markets like oil, gas, and rare earth minerals. Over 80% of global oil trade is conducted in dollars, a critical cornerstone of U.S. financial power.
- Destabilize U.S. financial markets by reducing demand for dollar-denominated assets like Treasury bonds.
Despite these ambitions, the U.S. dollar remains dominant, accounting for 58.4% of global foreign exchange reserves, according to the International Monetary Fund. In contrast, the Chinese yuan comprises only 2.8% of these reserves, illustrating the challenge any BRICS currency would face in displacing the dollar.
Economic profile of BRICS nations
The economic heft of the BRICS bloc gives the currency proposal its initial plausibility:
- China: $19 trillion GDP (second-largest globally), wielding disproportionate influence within BRICS and accounting for over 70% of intra-BRICS trade.
- India: $3.7 trillion GDP, one of the fastest-growing economies, contributing 15% of global economic growth in 2022 alone.
- Russia: $2.1 trillion GDP, heavily sanctioned but critical for energy exports.
- Brazil: $2 trillion GDP, a key player in agriculture and raw materials.
- South Africa: $400 billion GDP, representing a gateway to African markets.
However, the bloc faces deep economic challenges. For example, South Africa’s debt-to-GDP ratio exceeds 70%, and China’s total debt surpasses 280% of its GDP, signaling financial instability. These disparities weaken the foundation of any proposed shared currency.
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India’s trade with BRICS nations exceeds $250 billion annually, but 40% of this trade is with China, its largest geopolitical adversary. This heavy reliance on China underscores the risks of deeper economic integration within BRICS. By contrast, India’s trade with the United States—the largest trading partner for India—reached $191 billion in 2022, a more balanced and reliable economic partnership.
The Modi-Trump factor
Indian Prime Minister Narendra Modi and U.S. President-elect Trump share a deep personal rapport that underscores their shared vision for global leadership based on democratic principles and economic cooperation. Modi’s “Howdy Modi!” rally in Houston in 2019 and Trump’s reciprocation with the “Namaste Trump” event in Ahmedabad in 2020 showcased this partnership on the world stage. These events were not mere diplomatic gestures; they symbolized a strategic alignment between the world’s largest and most vibrant democracies.
Given this deep appreciation and alignment, it is implausible that India would entertain the BRICS currency proposal while Modi and Trump hold power. However, the reasons for rejecting such a proposal transcend individual leadership and are rooted in India’s fundamental commitment to democracy, sovereignty, and economic stability.
The risks of joining a BRICS common currency
India’s participation in a BRICS common currency initiative poses numerous risks:
1. Unpredictable authoritarian governments:
- Russia: Its authoritarian regime and global isolation make it an unreliable and risky partner.
- Iran: With a history of economic sanctions and confrontational policies, Iran introduces instability into the bloc.
- A totalitarian rival in China:
China, India’s greatest geopolitical adversary, wields outsized influence within BRICS. Joining a shared currency framework would entrench Beijing’s dominance over India’s economic and strategic decisions. - Volatile and unstable democracies:
Nations like Brazil and South Africa face recurring political and economic crises, undermining the bloc’s credibility. - Undemocratic members:
The inclusion of autocratic regimes like the UAE further contradicts India’s democratic values and global aspirations.
The case for an “Indo-American Axis”
India and the U.S., as the world’s largest and most functioning democracies, have a shared responsibility to provide global leadership. Together, they can establish an Indo-American Axis — an axis of economic giants and ideological allies around which the new world order can revolve. This partnership should focus on:
- Promoting liberty and freedom: Championing governance systems that respect human rights and individual liberties.
- Driving global prosperity: Collaborating on advanced technologies, renewable energy, and trade policies to ensure equitable growth.
- Countering authoritarianism: Offering a compelling alternative to the authoritarian models promoted by regimes like China and Russia.
This axis is more than a strategic necessity; it is a moral imperative to build a future grounded in hope, opportunity, and prosperity for all.
Joining a BRICS currency initiative would undermine India’s global standing, economic independence, and democratic principles. Instead, India must deepen its partnership with the U.S., championing a world order rooted in freedom, fairness, and shared prosperity. As Modi and Trump have demonstrated, the Indo-American partnership is not just a diplomatic necessity; it is the cornerstone of a stable, just, and prosperous future.
The BRICS currency proposal, while ambitious, does not deserve consideration under any government in Delhi. India’s role is to lead the world alongside the U.S., creating an axis of hope and opportunity for generations to come.
(Vinson Xavier Palathingal, Executive Director, Indo-American Center, Washington, D.C., is an expert on South Asia affairs and a dedicated policy advocate, championing strategies that uphold democratic values, safeguard individual liberties, and prioritize tangible benefits for ordinary citizens across the globe.)