Parliamentary Panel Examines India's Position on Local-Currency Trade Ahead of BRICS Summit
A Department-related Parliamentary Standing Committee examined India's approach to local-currency trade settlement, the role of the US dollar in global financial institutions, and the prospect of a common BRICS currency, ahead of India's hosting of the BRICS summit
The committee's questions to the government covered whether India intends to press a "de-dollarisation" agenda at the summit and India's current use of local-currency settlement mechanisms in bilateral trade
India's official position, reiterated by the Ministry of External Affairs and the Reserve Bank of India, is that de-dollarisation is not part of India's financial agenda; the stated approach is the incremental expansion of rupee-based trade settlement, not displacement of the dollar
India holds the BRICS chairship in 2026 and is scheduled to host the summit in New Delhi
Parliamentary Standing Committees: Oversight Mechanism
Department-related Parliamentary Standing Committees (DRSCs) are permanent committees of Parliament that scrutinise ministries' policies, budgets (Demands for Grants) and international commitments in detail, outside the full floor of the House. The Standing Committee on External Affairs is one of the 24 DRSCs, examining the Ministry of External Affairs.
The committee's questioning of the government on BRICS currency strategy is a routine parliamentary oversight function — probing the executive's international economic negotiating position ahead of a major summit, without the committee itself setting policy.
BRICS: Institutional Framework and India's 2026 Chairship
BRICS is an intergovernmental grouping of major emerging economies, originally conceived as an investment thesis (the acronym "BRIC," coined by Goldman Sachs economist Jim O'Neill in 2001) before evolving into a formal political-economic bloc.
The committee's questions on India's BRICS agenda directly concern the summit India is hosting as 2026 chair, making India's stated position on de-dollarisation and currency cooperation a live diplomatic and economic policy question.
De-Dollarisation and Local-Currency Trade Settlement: India's Actual Mechanism
"De-dollarisation" refers to reducing reliance on the US dollar as the dominant currency for international trade, reserves and financial settlement. India's actual policy tool is narrower and distinct: bilateral local-currency (rupee) trade settlement, not the creation of a common BRICS currency or an anti-dollar bloc.
Key Details
- RBI's Rupee Trade Settlement Mechanism was notified via A.P. (DIR Series) Circular dated 11 July 2022, permitting invoicing, payment and settlement of exports/imports in Indian Rupees through Special Rupee Vostro Accounts opened by Indian banks for correspondent banks of partner countries
- This mechanism was expanded to cover a growing number of partner countries following sanctions-driven disruption of dollar-based settlement after the Russia-Ukraine conflict
- The Ministry of External Affairs and RBI have both publicly clarified that a common BRICS currency is not under India's active consideration, distinguishing India's rupee-internationalisation goal from a dollar-displacement agenda
- At the 2024 Kazan (Russia) BRICS Summit, members agreed to boost local-currency trade and strengthen inter-bank settlement networks, again stopping short of a common currency proposal
The parliamentary committee's line of questioning tests whether India, as 2026 chair, will let the summit agenda drift toward an explicit de-dollarisation push — which the government has consistently distinguished from its actual, narrower rupee-settlement policy.
- BRICS founded: 2009 (as BRIC); South Africa added: 2010
- 2024-25 expansion: Egypt, Ethiopia, Iran, Saudi Arabia, UAE (2024); Indonesia (2025)
- New Development Bank: established via 2014 Fortaleza Declaration; HQ Shanghai; initial authorised capital USD 100 billion
- RBI Rupee Trade Settlement Mechanism: notified 11 July 2022, via Special Rupee Vostro Accounts
- India holds BRICS chairship in 2026 and is hosting the summit in New Delhi
- Government's stated position: de-dollarisation is not part of India's financial agenda; focus is on rupee trade settlement expansion