India's position on BRICS currency in the face of Trump's 100% tariff threats

New Delhi (The Uttam Hindu): As Donald Trump prepares to return to the White House in January 2025, his aggressive trade stance—now including a threat of 100% tariffs on BRICS nations, including India, if they proceed with developing their own currency to challenge the US dollar's dominance—has already caused waves in the global economy. This warning came after BRICS members met in Kazan, Russia, in October, where they discussed increasing non-dollar transactions. India, with its strong trade relationship with the US, is cautious about Trump's protectionist policies, which the President-elect claims are designed to protect American interests. India has been pushing for reduced dependence on the US dollar, as its diverse export portfolio to the US includes critical sectors like pharmaceuticals, IT services, and textiles. If Trump acts on his warning, Indian exporters could face higher costs, making their products less competitive in the US market.

However, India has been careful in its pursuit of de-dollarisation, especially since the US has recently become its largest trading partner, with bilateral trade surpassing USD 120 billion in FY24. External Affairs Minister S. Jaishankar has strongly opposed the idea of a BRICS currency. He stated that it is highly likely that BRICS members would continue to trade using their own currencies, citing the difficulty of aligning fiscal, monetary, and political policies across such diverse economies. He emphasized that for a common currency to work, there would need to be significant alignment in policies, something that isn't currently feasible.

BRICS, comprising Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE, has discussed a common currency in the past, but Jaishankar's remarks reflect India's cautious approach. Meanwhile, Trump’s 100% tariff threat if BRICS nations proceed with the currency plan is a clear signal of his administration's determination to maintain the dollar's supremacy. Trump remarked on Truth Social that if BRICS nations move forward with a common currency to replace the US dollar, they should “say goodbye to America” and “find another sucker.”