Indian External Affairs Minister Plays Down BRICS Common Currency Idea

Indian External Affairs Minister Plays Down BRICS Common Currency Idea

The BRICS Bloc leaders are scheduled to meet at a summit in Johannesburg, South Africa,  in August to explore the much-hyped potential for a gold-backed reserve currency. However, India's External Affairs Minister played down the talks on the issuance of a common BRICS currency. He stated that India is more focused on strengthening the rupee. 

India Curtails Common Currency Collaboration Talks 

India's External Affairs Minister has made a bold move by curtailing talks regarding the currency within the BRICS alliance. This unexpected decision has raised eyebrows and sparked discussions on India's stance within the group.

BRICS, an acronym for Brazil, Russia, India, China, and South Africa, is an association of emerging economies that aims to promote cooperation and economic growth among its members. Currency talks within the BRICS have been a topic of interest as member countries explore ways to reduce their dependency on the US dollar.

India's External Affairs Minister's decision to distance himself from these discussions suggests that they may have reservations or concerns about the potential consequences of such currency collaborations. It also raises questions about India's priorities and strategic outlook with its fellow BRICS members.

While further details regarding India's reasoning are yet to be revealed, this development adds a new layer of complexity to the dynamics within the BRICS. It will be interesting to see how this decision shapes future discussions and collaborations among member countries in terms of currency matters.

India Focuses on Strengthening the Rupee

Brazil, Russia, China, and South Africa seem to be backing the creation of a common BRICS currency, while India does not seem to be interested, according to Subrahmanyam Jaishankar, India’s external affairs minister. 

Jaishankar addressed a press conference on July 3, 2023, and stated that India is largely focused on strengthening the rupee, which is the country’s native currency.

“On what we will discuss at the BRICS meeting, we’ll have to see because there are many other issues, but there is no idea of a BRICS currency,” he said. 

The external affairs minister added:

"Currencies will remain a national issue for a long time to come."

Earlier in Jaishankar’s remarks on July 3, Joe Biden, president of the United States, and Narendra Modi, prime minister of India, highlighted the exceptional ties between the two nations, referring to them as “closest partners in the world.”

Amid the global economic uncertainty, the Indian  GDP has shown resilience, outpacing other members of the BRICS bloc. Moreover, the recent Goldman Sachs report predicts India could be the second-largest economy in the world by 2075. The Times of India has reported that India, which has strong ties with the US and Europe, is unlikely to risk its trade relationships with Western nations by endorsing a “yet-to-be-released BRICS currency.”

India Reduces Russian Oil Imports and Increases US Crude Purchases 

Vortexa, the energy intelligence company has revealed that India has reduced its purchases of Russian crude, and started buying more oil from the United States. Russian crude made up half of India’s imports in May. However, the daily oil imports from Russia to India dipped from 1.96 million barrels to 1.798 million barrels in June. The Times of India report has also suggested that India may be reluctant to accept new members of the BRICS bloc. India will want to establish “well-established criteria for qualification.”

The external affairs minister's decision could be driven by various factors, such as concerns over monetary policy autonomy or the belief that India's national interests are better served by maintaining its currency. Whatever the reasons may be, this move highlights a divergence in viewpoints within the BRICS bloc.

It remains to be seen how this development will impact future discussions and collaborations among the BRICS nations. As India continues to assert its position on matters of currency and international economics, it is clear that its stance within the BRICS framework is evolving.

What is your take on India’s decision to prioritize the rupee over a BRICS common currency? Please share your thoughts and opinions in the comments section below.