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BRICS Faces Credibility Test Over De-dollarisation and China’s Influence
BRICS is a group of large and developing countries that want to work together.
India is getting ready to host its next meeting in New Delhi.
The group has become bigger and economically stronger, but its members often disagree.
China is especially influential because it trades heavily with many BRICS countries.
Some members want to use their own currencies more instead of the US dollar.
The expert says a shared BRICS currency is not likely soon because the countries lack a common system for using it.
India has to cooperate with China while also maintaining important ties with the United States.
The main challenge is finding agreements without allowing one country to control the group.
India is preparing to host the BRICS Summit in New Delhi on September 12-13.
The bloc’s expansion has increased its economic weight but made consensus and a joint statement harder to achieve.
Expert Amitendu Palit says de-dollarisation and a common BRICS currency remain premature and distant prospects.
China’s trade reach, digital capabilities and economic support give it greater influence within BRICS, raising concerns for India.
India must balance its strategic relationship with the United States, complicated ties with China and its wider BRICS interests.
- Who
- BRICS members, particularly India and China, with analysis from Amitendu Palit of the National University of Singapore.
- What
- The expanding bloc is assessing de-dollarisation, currency cooperation, China’s influence and India’s strategic options.
- Where
- New Delhi, India.
- When
- India is preparing to host the BRICS Summit on September 12-13; the year is not specified.
- Why
- Expansion, geopolitical tensions, supply-chain disruptions and India-China rivalry are testing BRICS’ ability to reach consensus and influence global governance.
De-dollarisation and Integration Supporters
Pragmatic and Strategic Skeptics
Reducing dollar dependence
De-dollarisation and Integration Supporters
Some BRICS members support more trade in local currencies and see rising dollar-related transaction costs as an incentive to develop alternatives.
Pragmatic and Strategic Skeptics
The expert says the dollar remains convenient, widely accepted and the dominant reserve currency, while BRICS currencies lack comparable global confidence.
Prospects for a BRICS currency
De-dollarisation and Integration Supporters
Greater currency interoperability or a shared BRICS currency could provide members with an alternative to dollar-based transactions.
Pragmatic and Strategic Skeptics
A common currency is considered distant because BRICS has no operational framework comparable to the structure that preceded the euro; India’s commerce minister has emphasized interoperability rather than a single currency.
China’s role in BRICS
De-dollarisation and Integration Supporters
China’s large economy, extensive trade relationships and technological capabilities could help BRICS create alternative rules and support the wider Global South.
Pragmatic and Strategic Skeptics
China’s growing influence could turn BRICS into a sphere of Chinese influence, creating trust concerns and friction, particularly for India.
Key facts
- Host country
- India
- Summit location
- New Delhi
- Summit dates
- September 12-13
- Main credibility challenge
- Conflicting interests among an expanded membership are complicating consensus and a joint statement.
- Dollar’s role
- The United States accounts for roughly 15 percent of global trade, while the dollar’s share of trade invoicing and financial transactions is described as almost four times higher.
- Common currency outlook
- The expert says BRICS lacks the institutional framework needed for a common currency or broad currency interoperability.
- China’s advantage
- China is a major trade partner for all BRICS members and has advanced further in digital trade, artificial intelligence and digital-currency development.
Quotes
Amitendu Palit
Senior Research Fellow and Research Lead at the Institute of South Asian Studies, National University of Singapore
“I think India is in a bit of an awkward position in the Brics because India, for very obvious reasons, has a strategic engagement with the United States.”
firstpost.com
“The question of de-dollarisation, I think, is at this stage being taken in a bit of a premature manner.”
firstpost.com
Sources
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