In the international diplomatic arena, an intriguing development has recently surfaced: two major global powers, India and Russia, are engaging in strategic dialogues focusing on strengthening cooperation within significant international forums, namely the BRICS, the Group of Twenty (G20), and the Shanghai Cooperation Organization (SCO).
These discussions take on added significance as both countries are displaying a marked shift towards trade settlements in their respective national currencies, thereby diminishing their dependency on the U.S. dollar.
A high-level diplomatic dialogue
Dr. S. Jaishankar, India’s External Affairs Minister, recently met with his international counterparts, including Russia’s Foreign Minister Sergey Lavrov, during a two-day BRICS Foreign Ministers’ Meeting held in Cape Town, South Africa.
The BRICS, a global economic powerhouse, is an association of five significant economies: Brazil, Russia, India, China, and South Africa.
In the aftermath of his meeting with Lavrov, Jaishankar took to Twitter, expressing his positive feelings about the discussion. His tweet read, “Good to meet FM Sergey Lavrov of Russia in Cape Town this morning on BRICS FMM sidelines.”
His brief yet comprehensive message encapsulated the core essence of their discussions: bilateral matters, the G20, and SCO, in addition to the BRICS.
Strategic move away from the U.S. dollar
India and Russia, as BRICS members and participants in the G20 and SCO, are increasingly encouraging trade settlements in their national currencies.
This decision appears to be a strategic effort to reduce their reliance on the U.S. dollar and could potentially reshape the global economic landscape.
The Indian government has been working steadfastly to internationalize the rupee. In a recent G20 presentation, the Indian authorities outlined their ambition to establish the rupee as a global currency.
The ultimate aim is to facilitate international trade settlement in Indian rupees. Further exemplifying this trend, both the Indian and Bangladeshi governments have recently agreed to carry out their bilateral trade settlements in national currencies.
Echoing this sentiment, Lavrov emphasized that Russia is moving actively towards national currency settlements. He said, “Of course, as trade turnover grows, the transition to payments in national currencies will become more practical — this is the future.”
He also highlighted that this trend is not limited to India, but extends to Africa, Latin America, Asia, Iran, and China.
Future aspirations: A BRICS common currency
Looking beyond the current dynamics, the BRICS nations have started deliberations on creating a shared currency. This exciting prospect is likely to be a major point of discussion at the upcoming leaders’ summit.
Simultaneously, the BRICS is contemplating expansion plans as numerous countries have either formally applied to join the association or expressed their interest in doing so.
The deepening ties between India and Russia, as showcased by their recent dialogue, are an interesting testament to the evolving international dynamics.
The focus on national currencies over the U.S. dollar, in particular, marks a potentially seismic shift in global economic relationships. As the discussions continue and decisions are implemented, the BRICS bloc could continue to rise in importance and influence, rewriting the rules of global economics.
