In August, External Affairs Minister Dr S Jaishankar expressed skepticism about the need for a BRICS currency and said it was highly likely that the alliance members would continue to be involved in global trading by using their own currencies.
Even without Trump or his new 'avatar' and win in the crucial presidential polls this year; India, which shares a strong trade relationship with the US, has been cautious in its ambitious move to 'de-dollarise', given the fact that bilateral trade crossed the USD 120 billion mark in FY24.
Nevertheless, New Delhi should be wary of Trump's protectionist policies, which the President-elect argues are aimed at protecting America's interests.
India has been stressing the need to reduce dependence on the US dollar and its diverse export portfolio to the US includes critical sectors like pharmaceuticals, IT services and textiles.
If Trump indeed goes ahead with his warning, it could lead to higher costs for Indian exporters, making their products less competitive in the market.
Needless to add, as Donald Trump returns to citadel of power in Washington in January 2025, his aggressive trade stance - the latest now being a 100 per cent tariff threat on BRICS nations, including India, authorities could be concerned.
Trump's 100 per cent tariff warning to BRICS member nations came after the bloc's members met in Russia's Kazan in October 2024 where they discussed boosting non-dollar transactions.
If BRICS leadership including the likes of Vladimir Putin, Narendra Modi and X Jinping go ahead to develop their own currency to undermine the US dollar's dominance in global trades, the economy at the larger world stage will witness ripples.
India's External Affairs Minister S Jaishankar has already expressed strong reservations about adopting a BRICS currency, saying it was highly likely that the alliance members would continue to be involved in global trading by using their own currencies.
He asserted that it was necessary to be realistic about the extent of alignment among the members.
"The whole idea is, many of them say, 'Why do I need a third currency between us?' which is completely understandable. Sometimes it's a liquid issue. Sometimes it's a cost issue and it's an efficiency issue,” he said.
The External Affairs Minister had said that several aspects had to be considered before a common currency became a reality.
"From time to time, people have raised that there should be a BRICS currency but remember for countries to have a common currency, you need an enormous alignment of the very fundamentals of fiscal policies,
the monetary policies, economical policies or even have to check the political policies," he said.
BRICS comprises Brazil, Russia, India, China and South Africa, Egypt, Ethiopia, Iran and the UAE.
While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed up with the US's dominance of the global financial system.
India is one of the few countries within the BRICS that is performing well economically on its own merit, and it sees no compelling reason to support a common currency that could potentially undermine its economic stability.
ends
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