New Delhi / Johannesburg, Sept 4, 2025:
India’s long-standing aspiration to elevate the rupee as a global trade currency took a significant leap this week as the Reserve Bank of India (RBI) and the Ministry of External Affairs confirmed new measures within the BRICS framework to expand trade settlements in rupees.
India’s long-standing aspiration to elevate the rupee as a global trade currency took a significant leap this week as the Reserve Bank of India (RBI) and the Ministry of External Affairs confirmed new measures within the BRICS framework to expand trade settlements in rupees.The development, hailed as a “proud moment for India’s financial sovereignty”, allows BRICS partner nations to conduct cross-border trade using Special Rupee Vostro Accounts (SRVAs), bypassing the traditional dependence on the U.S. dollar. Officials said the move reflects not only India’s growing economic strength but also the trust other emerging economies are placing in the rupee.
A Milestone for India’s Currency Diplomacy
The RBI announced that foreign banks from BRICS countries and other trade partners can now open SRVAs without prior approvals, accelerating rupee-based settlements. The change is expected to simplify trade for Indian exporters and reduce transaction costs, especially for SMEs and startups.
“This is not just a technical reform—it is a statement,” an official from the Finance Ministry told reporters. “India is signaling to the world that the rupee is ready to share space with the dollar in global trade.”
Prime Minister Narendra Modi described the move as “a proud step towards strengthening India’s financial sovereignty,” adding that the rupee’s internationalization will empower Indian businesses and reduce vulnerability to currency shocks.
Global Context: A Shift Beyond the Dollar
The announcement comes at a time when BRICS nations are openly debating ways to reduce overdependence on the U.S. dollar. While talk of a unified BRICS currency remains exploratory, the consensus is shifting toward encouraging local currency trade.
Global trust in the dollar, which still accounts for nearly 58% of world reserves, has been shaken in recent years due to geopolitical tensions and unilateral sanctions. India’s rupee initiative, alongside platforms like BRICS Pay, is being seen as a pragmatic and confidence-building step toward a multipolar currency order.
Market Reaction and Challenges Ahead
The rupee showed mild appreciation on Thursday, with traders citing optimism over the government’s announcement. Market analysts, however, noted that while symbolic, the rupee’s road to becoming a true reserve currency will be gradual.
“The significance is geopolitical as much as economic,” said Dr. Ritu Singh, an economist at Delhi University. “For the rupee to gain real strength internationally, India must sustain its high growth, ensure macroeconomic stability, and build deep global acceptance.”
Still, exporters—especially in the textile, pharmaceuticals, and IT services sectors—are expected to benefit from smoother settlements with BRICS partners.
India’s Balancing Act
Experts highlight that India’s approach is not aimed at replacing the dollar but at “derisking” international trade. Unlike some BRICS members who have called for a collective alternative currency, India has chosen a calibrated strategy: making the rupee a stronger option without destabilizing global finance.
This careful balance is being praised both domestically and abroad. “It is a proud moment for India because we are not just participants in global finance anymore—we are shaping its future,” said CII President Sanjiv Bajaj.
Looking Forward
More Bilateral Agreements: India is expected to sign additional pacts with BRICS members to expand rupee trade volumes.
Boost for MSMEs: Lower forex costs and reduced reliance on the dollar could directly benefit small exporters.
Global Perception: If successful, the rupee may gradually feature in reserve portfolios of friendly nations.