BRICS member India may consider accepting local currencies for trade and sideline the US dollar only if they are ‘non-binding’, according to sources on the condition of anonymity. The decision to accept native currencies could be taken at the upcoming summit in October in the Kazan region of Russia. India is keen on using local currencies only when they are non-binding.
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For the uninitiated, non-binding means the rules of accepting local currencies must not be legally necessary to obey, and must come out of choice whenever required. BRICS country India does not want to end reliance on the US dollar as its economy is booming and needs the currency to survive.
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BRICS: India Would Want the Rupee & Not the Chinese Yuan For Trade Settlements
BRICS counterpart China has been pushing for trade settlements among member nations through the Chinese yuan. India is skeptical about using the Chinese yuan as the Modi administration wants to make the rupee global. It will only accept local currencies if the conditions are non-binding and based on the benefits and comfort level economically.
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“New Delhi is examining an appropriate response based on the extent to which it would benefit economically and diplomatically from the proposals without increasing its vulnerabilities vis-a-vis China,” the source said. “It is each according to its comfort level. Within BRICS if you agree for currency settlement, you may choose not to do with x country, while doing with others. If India chooses not to do with China in yuan and rupee, it is okay. But it may do with other countries, for instance, the ruble or rand.”
The decision to accept local currencies on the condition of non-binding could be taken at the 16th BRICS summit. The US dollar could be the most discussed topic at the summit as BRICS nations aim to de-dollarize their economies.
