Why Delhi Won't Ditch US Dollar And What It Means For BRICS Currency

India is hosting the 2026 BRICS summit. And it walks in with a message that will disappoint the bloc's loudest voices: it isn't quitting the dollar.

New Delhi has said this before, in different words, at different podiums. But the timing now matters more. China and Russia keep pushing de-dollarisation as a strategic project. Brazil's Lula has made it a personal cause. And India, the second-largest economy in the grouping, keeps finding polite ways to say no.

The twist is that India isn't sitting this one out either. It's pushing something narrower and more technical: linking central bank digital currencies across BRICS to make trade and tourism payments smoother. That's a payment upgrade, not a currency revolution.

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The Line India Won't Cross

India's position was laid out plainly by External Affairs Minister S Jaishankar at the Carnegie Endowment in Washington. Targeting the dollar, he said, is "not part of our economic, political, or strategic policy." India has concerns about dollar dependence, he added, but concern isn't the same as a campaign to replace it.

This distinction has held for two years now, even as the BRICS table got more crowded. Egypt, Ethiopia, Iran, Saudi Arabia and the UAE have all joined since 2024, and each brought its own reasons to distrust dollar hegemony. India has stayed in the room without signing on to the project.

Part of the reason is blunt self-interest. A shared BRICS currency would need the kind of fiscal and political unity that a bloc this diverse simply doesn't have. Rishi Shah, Partner and Economic Advisory Lead at Grant Thornton Bharat, told NDTV, "A monetary union in the traditional sense without the political and fiscal commonality of a single nation behind it, does not make economic or political sense for a bloc as diverse as BRICS. Some easier or common way to trade may be explored though remains premature given the dominance of the greenback."

Photo Credit: NDTV

What India Is Actually Building

Here's where it gets specific. According to a Reuters report, the Reserve Bank of India has recommended the government put a formal proposal to link BRICS members' central bank digital currencies (CBDCs) on the summit agenda. If it goes through, it would be the first time such a plan is placed in front of BRICS leaders directly.

This builds on a 2025 declaration from the Rio de Janeiro summit, which called for better interoperability between BRICS payment systems. The RBI's push turns that vague commitment into an actual technical proposal, one aimed squarely at cutting the cost and friction of cross-border trade and tourism payments within the bloc.

It comes with real obstacles, though. Any digital currency link needs agreement on shared technology standards, governance rules, and (critically) a way to handle uneven trade flows between members. Some countries are also wary of adopting payment infrastructure built by a rival BRICS member, which slows everything down.

India has run into this exact problem before. Its earlier push to settle more trade with Russia in rupees backfired: Moscow ended up holding large rupee balances it couldn't easily spend, forcing the RBI to let Russia park that money in Indian government bonds instead. One option now on the table to avoid a repeat is bilateral currency swap lines between central banks, so no one gets stuck holding a currency they can't use.

There's also a political undercurrent. Washington doesn't love any of this. President Trump has called BRICS "anti-American" and has threatened tariffs on members he sees as bypassing the dollar. India, walking a line between its BRICS membership and its Quad and G7 relationships, has to build this CBDC proposal carefully enough that it reads as a payments efficiency project, not a dollar workaround.

India's $226 Billion Problem 

The most useful reality check comes from Sohom Banerjee, founder of the advisory and research firm Quantive Advisory LLP. "The current discussion around BRICS payment integration is often framed too narrowly as a question of de-dollarisation. That misses the more important issue. The real opportunity lies in reducing transaction costs, settlement delays and dependence on a limited number of cross-border payment channels," he told NDTV.

Then comes the number that should shape the whole conversation: India's trade deficit with the rest of BRICS has crossed $226 billion. India buys far more from the bloc than it sells to it. Banerjee's argument is that this imbalance breaks the logic of local-currency settlement before it even starts. When one side runs a persistent surplus, it piles up the other side's currency, and then has to figure out what to do with it. Reinvest it? Convert it? Hold it in assets that are actually worth holding? Without an answer, switching from dollars to rupees or yuan doesn't fix anything. It just changes the label on the same imbalance.

A serious BRICS payment system needs a lot more scaffolding than a digital currency link: credible swap arrangements, liquidity backstops, common settlement standards, real compliance frameworks, and clear rules for dealing with currency balances that pile up. And there's a sequencing risk too: if payment integration moves faster than trade diversification, it could make India's imports even easier while doing nothing for its exports, deepening the exact imbalance it's supposed to solve.

Therefore, India needs a layered approach, not a single alternative to the dollar: keep using the dollar where it's efficient, expand local-currency settlement where trade flows actually support it, use swap lines to manage liquidity, and test CBDC links in a few corridors before scaling up. The real test for BRICS isn't how much trade it can pull away from the dollar; it's whether it can build a system that's cheaper, more liquid, and better matched to actual trade flows, said Banerjee.

Photo Credit: NDTV

What This Means For The BRICS Currency Dream

First, it caps how far BRICS de-dollarisation can go. A BRICS-wide currency needs its two biggest non-Western economies pulling in the same direction. China wants exactly that outcome, partly because a yuan-centric alternative extends its own influence. India, wary of exactly that outcome, keeps the ambition boxed in. As long as Delhi treats this as a payments problem and not a currency problem, a genuine BRICS currency stays a talking point, not a project.

Second, it reframes what "de-dollarisation" even means in practice. The RBI's CBDC proposal isn't a rebellion against the dollar. It's an efficiency play, aimed at the plumbing of trade settlement, not the pipes of reserve currency status. Banerjee's framing - efficiency and resilience over symbolism -- is likely to be the operating logic India brings to the summit table, whatever language ends up in the final communique.

Third, the trade imbalance is the real constraint, and it isn't going away on its own. A CBDC link can cut settlement time and transaction costs. It cannot manufacture reciprocal trade flows where none exist. Until India's trade with the rest of BRICS looks less lopsided, any local-currency or digital-currency scheme risks becoming a more efficient way to hold an imbalance rather than a way to remove it.

None of this means the summit will be a non-event. A first-ever formal proposal to link BRICS digital currencies, even a cautious one, is a real step -- and a signal to Washington that India intends to hedge, even if it won't decouple. But the headline out of Delhi this year is unlikely to be about killing the dollar. It's more likely to be about building faster pipes, while leaving the water where it is.