In a world reshaped by economic sanctions, supply chain disruptions, and rising protectionism, countries are reimagining how trade is conducted. The goal is not to reject the old ways, but to explore better ones.
At its centre, let’s rethink an emerging idea: diversify trade settlements to make the whole system more inclusive and resilient. The goal isn’t to dethrone the US dollar, but to democratise the access to global commerce.
India’s Pragmatic Path: From Compliance to Confidence
India, historically a measured and cautious player in international diplomacy, is quietly becoming one of the most pragmatic advocates for financial diversification. Its recent decisions, post the Russia-Ukraine conflict, paved the way for a new era of economic maturity. It prioritises strategic autonomy to uphold sovereign interests over political allegiance to anyone.
One of India’s most significant moves was its decision to expand oil trade with Russia after U.S. sanctions over the Ukraine conflict, more importantly, choosing to settle those trades in currencies other than the dollar, such as.
- Indian Rupees
- UAE Dirhams
This was not a symbolic gesture, but a systemic shift requiring:
- To support this shift away from dollar dependence, countries like India have introduced revamped banking protocols, explored alternative trade financing routes, and established coordinated diplomatic and commercial frameworks that facilitate non-dollar transactions with trusted partners.
Amid global shifts, concerns over single currency dominance and fluctuations, the calls for alternatives have echoed across trade circles. Among the voices is Indian industrialist Jagjiv Kumar Arora, a notable global trade entrepreneur and respected name in the steel industry, who has time and again shared insights on currency-linked trade imbalances at platforms like the Indian Consulate in the UAE, IOD Dubai, and the UK House of Lords.
In his own words, “Trade doesn’t always need to be dominated by dominant reserve currencies. A balanced, fundamentals-driven approach to exchange can protect national interests and democratize global commerce.” The sentiment, expressed by Mr Jagjiv Arora, captures the broader intent, a recalibration of global trade on more equitable and autonomous terms, and seems to be getting a deeper relevance in today’s ongoing tariff tussle.
BRICS: A Collective Push from Major Economies
The BRICS alliance, now expanded to include Egypt, Ethiopia, Iran, and the UAE, is also exploring this middle path to take a stand for their own interests, as something that Mr Arora has time again reiterated. The purpose of BRICs seems to be solely working for a multilateral currency ecosystem.
BRICS (Brazil, Russia, Indian, China, South Africa) initiatives include:
- Local currency settlements
- Bilateral currency swaps
- Exploration of a BRICS clearing system for trade
Though the concept of a unified BRICS currency has gained attention, most economists agree it’s still aspirational due to the diversity of each countries’ economic structure. What’s more achievable and already underway for BRICS members are trade corridors in local currencies, backed by mechanisms for risk adjustment and transparent convertibility.
De-Dollarisation | A Shift Worth Watching
To those enthusiastic about the long-ongoing de-dollarisation debate, India’s moves are undeniably part of that larger undercurrent. However, the US dollar is an extremely dominant trade currency, still accounting for:
- Approximately 60% of global forex reserves
- Over 89.8% FX Transaction Volume
And it remains central to the SWIFT financial system. However, overreliance on one currency, particularly the one which is susceptible to political influence, can be risky for nations seeking neutral ground in geopolitical conflicts.
This concern isn’t new, but it is being voiced with greater clarity today. One Indian entrepreneur frames it pointedly: “If a country like the UAE can benefit from the predictability of a fixed exchange rate, imagine the mutual gains if major trading partners like India and the UAE transact directly in a common currency,”.
The comment, made by Jagjiv Arora, echoes a broader point of view gaining traction in emerging economies. Yet India’s tone remains non-confrontational. It is not seeking to replace the dollar, but rather to rebalance the global trade framework.
The India Model: Diplomacy, Not Disruption
Unlike nations that use financial tools to disrupt, India is using them to diplomatically diversify its cross-border transactions. It has further offered its tried and tested local currency trade frameworks to several trade partners, such as:
- Russia
- UAE
- Bangladesh
- Mauritius
- Southeast Asian nations
Rather than challenging the West, India’s goal is to build bridges in the South. The intent is very precise & clear to all: explore options, reduce exposure to unilateral decisions from a single nation, and strengthen regional economic integration among partners.
The Role of Institutions: Creating Space for Innovation
For this shift to mature, India’s financial institutions must become the enablers. While the RBI remains conservative, and rightly so in a volatile world, the government and banking sector must be ready to:
- Provide clarity on taxation and forex for local currency trade
- Support MSMEs with risk management tools
- Develop pilot corridors that inspire confidence for scale
India’s success will depend not just on intent but on its execution, that’s reliable and secure.
Why This Is Not an Anti-Dollar Argument
India still uses the dollar. It always will, just as it will use the euro, pound, yen, and eventually CBDCs. What’s evolving is the exclusivity of the dollar, not its utility. The new idea is not currency competition, but currency cooperation.
A Multipolar Financial Future
The shift underway is not dramatic but deliberate. It is not about standing against any nation, nor is it anti American. It reflects the need of the hour, a quiet post alignment. The world no longer fits into a single financial mould, and perhaps it never truly did.
India’s overall approach is balanced: Trade with the West continues, but new structures are quietly taking shape. Countries like India are not abandoning old systems, just exploring alternatives. Risks are being managed, not ignored, to build a more flexible and resilient global order.
This isn’t a revolution. It’s a recalibration.
Final Thought: Sovereignty in Every Settlement
India’s quiet transformation is setting a tone of constructive autonomy rather than aggressive decoupling. While others talk of global resets, India is showing how to build alternatives without burning bridges with the existing framework.
And in this evolution, every rupee traded in choice, every dirham settled in consensus, and every policy shaped in prudence becomes part of a larger movement not just toward de-dollarisation, but toward democratised trade.
