India remains cautious of the de-dollarisation efforts. It favours gradual rupee-based trade but is wary of Chinese financial influence, carefully balancing BRICS participation with its deep Western economic ties
Global fixation with US currency slowly waning as nations attempt to strengthen regional alliances & local currencies
For decades, the US dollar has been the bedrock of global finance. Now, a challenge is unfolding. BRICS nations are accelerating efforts to bypass the dollar in trade and investment, triggering a fierce response from Washington—led by President Donald Trump.
Even before taking office in January 2025, Trump had made his stance clear. As President-elect, he warned that any BRICS attempt to undermine the dollar or launch a rival currency would face a 100 per cent tariff on exports to the US. Once in power, he doubled down, threatening severe economic penalties on nations pursuing de-dollarisation. In a blunt declaration, he proclaimed, “BRICS is dead,” underscoring his determination to defend US financial supremacy.
Despite these threats, BRICS leaders remain undeterred. Brazilian President Lula da Silva and others insist on advancing de-dollarisation, signalling a shift in the global financial order. China and Russia, heavily sanctioned by the West, now conduct most bilateral trade in yuan and roubles. The BRICS-led New Development Bank has shifted toward local currency lending to reduced reliance on the dollar. Brazil and China have formalised agreements for national currency trade, while India and the UAE have executed oil deals in rupees. Meanwhile, China and Russia continue to amass gold reserves to shield their economies from dollar-linked risks.
At the heart of this movement is a desire to escape US economic coercion. Russia and Iran, both sanctioned, have spearheaded efforts to establish alternative financial systems. China has aggressively promoted the yuan, particularly in energy transactions. If Saudi Arabia embraces yuan-based oil settlements, it could weaken the petrodollar system—a pillar of US financial dominance. The inclusion of energy giants like Saudi Arabia, UAE, Egypt, and Iran in BRICS further strengthens the bloc’s leverage in global trade.
However, the lack of a unified BRICS currency, coupled with global reliance on the dollar poses significant hurdles. The yuan faces convertibility challenges, and many nations still view US financial systems as more secure.
While BRICS de-dollarisation efforts do not pose an immediate existential threat to the dollar’s hegemony, they represent a gradual but significant shift in the global financial landscape. If more nations transition to non-dollar trade settlements, BRICS financial institutions develop viable alternatives to Western banking networks, and US sanctions continue to alienate global partners, the de-dollarisation movement could accelerate. The dollar’s dominance remains intact for now, but the foundations of a multipolar financial system are steadily being laid, signalling a slow but persistent erosion of its unchallenged supremacy.
India supports gradual de-dollarisation, particularly through rupee trade settlements and local currency lending, but it is not looking to challenge the dollar outright.