NEW DELHI – A week after US President-elect Donald Trump threatened 100 % tariffs against any backers of a” BRICS currency”, key emerging powers such as India have quickly distanced themselves from any BRICS-led de-dollarization initiative.
” Right then, there is no plan to have a BRICS money. So I’m not quite sure what is the foundation for]Trump’s note ]”, India’s External Affairs Minister S Jaishankar said during the Doha Forum held in New Delhi this year.
The top minister of India made it clear that “each state doesn’t have an identical placement on this,” despite the fact that there are ongoing discussions about streamlining and advancing “financial transactions” among Six countries.
” ]W] these India’s involved, the United States is our largest business partner and we have no interest in weakening the dollar at all”, he added, emphasizing India’s selection of relations with the West.
Days earlier, Reserve Bank of India Governor Shaktikanta Das also clarified that” ]t ] here is no step which we have taken that specifically wants to de-dollarize]which ] certainly ]is ] not our objective” despite ongoing attempts to diversify the country’s pool of foreign currency reserves.
India’s northern banker even questioned the validity of a BRICS money given the “geographical spread of the countries…unlike]common money devices like ] the eu which has geographical contiguity”.
In his sly attempt to reestablish National supremacy, the second Trump administration may end up boosting the chances of a BRICS currency.
A ham-fisted approach to diplomatic relations with key rising powers, however, will likely just strengthen their resolve to group together and , cooperatively undermine any US-led international order.
Not only India but another non-Western forces for Indonesia, Turkey, Malaysia and Saudi Arabia will also likely not simply join the BRICS but also more positively lead to new “de-dollarization” initiatives.
In recent years, America has attempted to win foreign support and has been slowly forming a new alliance to “de-risk” China, mainly in high-tech goods like expensive electronics and the tools used to create them.
But Trump’s good unilateralist policies, including higher blanket tariffs, could inspire rising powers, particularly those in BRICS, to double down on efforts to “de-risk” from the US, paving the way for a new world order immediately.
To be sure, de-dollarization is complicated and mostly also aspirational. For example, India has struggled to enact its more narrow, diplomatic non-dollar-denominated deal with important lovers such as Russia.
Moscow is accumulating US$ 1 billion every month that it struggles to use because of both American sanctions and India’s funds control measures, in the midst of a historically increase in India’s trade of greatly discounted Russian oil.
” This is a problem”, Russia’s Foreign Minister Sergei Lavrov told reporters during last year’s Shanghai Cooperation Organization (SCO ) meeting. ” We need to use this money. However, these rupees must be transferred to a different currency for this, and this is being discussed right now,” he continued.
Leading Russian experts, like Alexander Knobel, have warned that India’s mass of “frozen funds” will likely “reach tens of billions of dollars,” and that the” situation is aggravated by India’s historically high aggregate trade deficit, which reduces the chances of clearing settlements with third countries.”
Similar issues have previously developed as a result of a boom in non-dollar-denominated trade between major oil customers like India and China, one of the BRICS members, and Iran, another country that is also heavily sanctioned by the West.
Nevertheless, the world’s most populous nation continues to maintain robust ties with Russia, a major source of armaments and hydrocarbon goods throughout the past decades.
This week, Indian private refiner Reliance , ( RELI. NS )  , secured a massive deal with Russia’s state oil firm Rosneft , ( ROSN. MM). The 10-year agreement, amounting to a whopping 0.5 % of the entire global supply, is worth roughly$ 13 billion  , a year.
The new deal notably accounts for roughly half of Rosneft’s seaborne oil exports, making Indian markets a leading customer.
As the two BRICS countries strengthen trade and energy ties, Russian President Vladimir Putin is likely to travel to New Delhi soon. India imports a third of its energy from the Eurasian nation, but the South Asian nation has replaced the European Union as Russia’s top energy client.
Trump, who is determined to keep American dominance, warned on his social media platform ( Truth Social ) that partner countries could” face 100 per cent tariffs, and should expect to say goodbye to selling into the wonderful US economy” unless they agree to “neither create a new BRICS currency, nor back any other currency to replace the mighty US Dollar.”
Harkening back to his” Make America Great Again” foreign policy mantra, the incoming US president warned any backers of a BRICS currency:” They can go find another’ sucker.’ There is no chance that the BRICS will take the place of the US dollar in global trade, and any nation trying should wave goodbye to the United States.
Some in India hope for lessening the criticism of its long-standing relations with Russia in light of Trump’s support for a peace agreement in Ukraine. Nevertheless, the South Asian powerhouse has remained staunchly non-aligned in its foreign policy, eager to exploit great power rivalries for its own national interest.
A knowledgeable New Delhi resident said,” Whenever the West bashes us, we gain credibility in Moscow,” underscoring India’s preference to play the superpowers off one another while maintaining strong ties with both Washington and Moscow.
If anything, India’s Narendra Modi-led administration is relatively bullish on relations with a second Trump administration.
” We had a strong and solid relationship with the first Trump administration…Yes, there were some issues mostly trade-related, but there were a whole lot of issues on which President Trump was actually forward-leaning”, Jaishankar said during the Doha Forum this week.  ,
According to our analysis, Prime Minister Modi and President Trump have a close relationship, “in my opinion.” In terms of politics, we really don’t have divisive issues”, he added, underscoring New Delhi hopes to leverage personal diplomacy with the incoming US leader.
Given India’s economic momentum and its emerging centrality in global growth, any global de-dollarization push will benefit from its foreign policy leanings.
Currently, the US dollar accounts for more than half of the world’s trade invoices and more than 80 % of all international currency transactions. Trump’s policies, however, could unintentionally affect how much the US dollar is used in the upcoming years.
On the one hand, it is still to be seen how the upcoming US administration will deal with pending bilateral disputes with benevolent BRICS members like India.
” A major source of concern is the fate of large number of Indians illegally residing in America”, a source in India with deep ties to Washington, DC, told this writer. If Trump implements the draconian immigration policies he vowed on the campaign trail, up to 18, 000 Indians could face deportation in the coming months.
Moreover, Trump’s fiscal policies, including massive tax cuts, could add as much as$ 15 trillion to America’s already sky-high$ 36 trillion national debt. Trump’s plan to impose unprecedented tariffs across the board may, in addition, totter global trade and lower the value of foreign currency reserves held by its major trading partners.
Malaysian Prime Minister Anwar Ibrahim has  , welcomed , the end , of an American-led unipolar world and, accordingly, has pivoted to the BRICS and China, which he has described as a springboard for the creation of a more multipolar order.
For his part, Indonesia’s new president, Prabowo Subianto, has reversed his predecessor Joko Widodo’s policy by actively seeking membership in the BRICS. These new rising powers join the bloc to strengthen ties with Beijing, a major investor and trade partner, as well as express some unease with the US-led order.
Follow Richard Javad Heydarian on X at @Rich Heydarian