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India Lets 30 Countries Trade With Rupee in New BRICS Strategy
As tensions escalate between Washington and the BRICS alliance, India has taken a bold step to internationalize the rupee, allowing nearly 30 countries to settle cross-border transactions directly in its national currency. The move comes just as U.S. President Donald Trump imposed steep 25% tariffs on Indian goods, citing what he described as anti-American activities, including New Delhi’s ongoing energy and defense partnerships with Russia.
The development represents a clear advance in the BRICS bloc’s de-dollarization strategy, with India now positioning the rupee as an alternative settlement currency for international trade — a direct challenge to U.S. dollar dominance.
Rupee Push Gains Momentum Through Vostro Accounts
At the heart of India’s effort is the use of Vostro bank accounts, a mechanism enabling foreign countries to settle transactions with India in rupees rather than relying on the U.S. dollar or other reserve currencies. These accounts are maintained by Indian banks on behalf of overseas banks, allowing direct rupee remittances without conversion losses.
The Reserve Bank of India (RBI) recently removed caps on investments made via these accounts, signaling a major policy shift toward facilitating rupee-based trade.
So far, 22 of the 30 countries have already executed trades using the rupee, including both BRICS members and key economic partners:
BRICS/Partners: Russia, Belarus, Malaysia, Uganda
Others: Bangladesh, Botswana, Fiji, Germany, Guyana, Israel, Kazakhstan, Kenya, Maldives, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Singapore, Sri Lanka, Tanzania, United Kingdom
Trump Responds with Tariffs and Penalties
While India moves ahead with its rupee trade initiative, President Trump has responded forcefully. In addition to the 25% tariffs on Indian imports, the U.S. has penalized India for purchasing Russian crude oil and military hardware, defying American sanctions on Moscow.
Trump’s latest actions are part of a broader strategy to confront BRICS countries that seek to undermine the dollar’s global role. India’s growing rupee diplomacy is being interpreted in Washington as a key piece of this puzzle.
Trump, in his public remarks, has warned that nations benefiting from U.S. trade ties must not simultaneously support alternative financial systems that weaken American influence. His administration appears to view India’s Vostro-driven settlement system as a strategic provocation.
India Advances, BRICS Realigns
India’s rupee trade policy is not just about currency—it is a geopolitical signal of intent. By reducing reliance on the dollar for trade settlements, New Delhi is asserting economic sovereignty, while also reinforcing BRICS goals of multipolar finance and reduced Western dependency.
According to sources familiar with the RBI’s strategy, the goal is long-term: to position the rupee as a viable medium of exchange within Asia, Africa, and the broader Global South.
In this new financial architecture, BRICS-aligned economies are working together to design non-dollar payment rails, and India is becoming a central player in that effort.
Outlook: Rupee Trade Meets Washington Resistance
While India’s Vostro framework is gaining traction globally, its future viability will depend on how the U.S. reacts in the coming months. The Trump administration’s tariffs are just one layer of pressure. Additional sanctions or financial restrictions on countries using rupee settlements could emerge, potentially complicating India's push.
Still, India’s currency diplomacy signals a deeper BRICS realignment, one where national currencies replace dollar hegemony — at least in targeted sectors of bilateral trade. What comes next may reshape global commerce and force emerging economies to choose between U.S. alignment or BRICS autonomy.
@ Newshounds News™
Source: Watcher.Guru
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