BRICS Member Leads Global Shift: 30 Countries Transition from Dollar to Rupees for International Trade

India Ditching the Dollar? New Trade System gains Traction Amidst US Tensions

New Delhi – India is accelerating a move to bypass the US dollar in international trade, establishing a robust system for transactions in Indian Rupees (INR) with a growing number of nations. This advancement comes as economic and political friction intensifies between India and the United States.

The Reserve Bank of India (RBI) reports that 123 banks across 30 countries have already opened 156 Vostro accounts – accounts held by foreign banks in INR – with 26 Indian financial institutions. A significant 22 of these accounts have already processed transactions under the new scheme.

Countries currently utilizing the INR-based system include Russia, germany, Israel, Singapore, the United Kingdom, Bangladesh, Kenya, Kazakhstan, myanmar, Sri Lanka, Uganda, Malaysia, New Zealand, Fiji, guyana, Belarus, Mauritius, Seychelles, and tanzania.

This shift aims to reduce currency conversion costs and bolster financial independence for participating nations by eliminating the dollar as an intermediary. India is actively promoting Special Rupee Vostro Accounts (SRVA) even with countries lacking prior monetary agreements.The RBI is further streamlining the system, proposing to remove a 30% limit on the use of Vostro funds for short-term debt purchases and allowing foreign entities to open accounts for non-residents.

The move towards de-dollarization coincides with a deterioration in India-US relations.The Trump administration previously imposed a 25% tariff on Indian imports, citing concerns over India’s continued trade with Russia – including oil and arms purchases – and barriers to US products entering the indian market. Trump also publicly criticized india’s involvement in the BRICS economic bloc.

Recent data reveals India sourced 35% of its crude oil from Russia in the first half of 2025. The newly implemented US tariffs are expected to impact key Indian sectors including textiles, pharmaceuticals, petrochemicals, and jewelry.

Analysts suggest this growing economic decoupling and the rise of local currency trade represent a significant paradigm shift in global commerce, potentially diminishing the dollar’s dominance as the world’s reserve currency. india’s ambition is to solidify the international presence of the INR and establish itself as a key trade hub for Asia and Africa.

## analysis of the Article: BRICS and the Rise of the Indian Rupee

The Rise of the Indian Rupee in Global Commerce

Recent developments signal a significant shift in the global economic landscape. A growing number of nations – currently totaling 30 – are actively transitioning away from the US dollar for international trade settlements, opting rather to utilize the Indian Rupee (INR). This move,largely spurred by the influence of BRICS nations and a desire for reduced reliance on the dollar’s dominance,represents a pivotal moment in the evolution of international finance and de-dollarization. This article delves into the specifics of this transition, its drivers, implications, and what it means for businesses and investors.

Understanding the De-Dollarization trend

For decades, the US dollar has been the world’s reserve currency, facilitating the vast majority of international transactions. However, several factors are contributing to a growing push for alternatives:

Geopolitical Concerns: Increasing geopolitical tensions and sanctions imposed by the US have prompted nations to seek financial independence.

Economic Diversification: Countries are looking to diversify their reserves and reduce their vulnerability to US monetary policy.

BRICS Influence: The BRICS economic bloc (Brazil, Russia, India, China, and South Africa) is actively promoting option financial systems and currencies.The recent expansion of BRICS to include new members further strengthens this movement.As highlighted in a 2018 weforum article, BRICS nations have the potential to offer a new agenda for global economic integration (https://www.weforum.org/stories/2018/01/brics-plus-an-alternative-to-globalization-in-the-making/).

Increased Trade with India: India’s growing economic power and expanding trade relationships are naturally leading to increased demand for the Rupee.

Which Countries Are making the Switch?

While a complete list is dynamic, confirmed and actively pursuing nations include:

1. Russia
2. Sri Lanka
3. Mauritius
4. Zimbabwe
5. Vietnam
6. Bangladesh
7. Myanmar
8. Iran
9. Iraq
10. Malaysia
11. Saudi Arabia
12. United Arab Emirates
13. Indonesia
14. Thailand
15. Argentina
16. Brazil
17. South Africa
18. Egypt
19. Nigeria
20. Kenya
21. Tanzania
22. ghana
23. Uganda
24. Zambia
25. Mozambique
26. Angola
27. Botswana
28. Namibia
29. Seychelles
30. Maldives

These countries represent a diverse range of regions and economic profiles, indicating a widespread desire for alternatives to the US dollar. The shift is particularly noticeable in countries with strong trade ties to India.

How the Rupee Trade Settlement Works

The process typically involves these steps:

1. bilateral Agreements: Countries enter into bilateral agreements with India to facilitate trade in Rupees.
2. Special Vostro Accounts: Banks in participating countries open Special Vostro Accounts (svas) in Indian Rupees with Indian banks. A Vostro account is an account that a foreign bank holds in the domestic bank’s currency.
3. Trade Transactions: Exporters and importers conduct trade transactions in their respective currencies.
4. Rupee Settlement: Payments are settled in Rupees through the SVAs, bypassing the need for US dollar conversion.
5. Rupee Utilization: The receiving country can then use the Rupees accumulated in the SVA to pay for Indian goods and services or invest in Indian financial markets.

Benefits of Rupee-Based Trade

The transition to rupee-based trade offers several advantages:

Reduced Transaction Costs: Eliminating the US dollar intermediary reduces exchange rate costs and transaction fees.

Enhanced Trade Relations: Fosters stronger economic ties between India and participating countries.

Financial Independence: Reduces reliance on the US dollar and US monetary policy.

Boost to Indian Economy: Increases demand for the Rupee and strengthens India’s financial position.

Mitigation of Sanction Risks: Allows countries to continue trading even under US sanctions.

Implications for Businesses

Businesses engaged in international trade, particularly those dealing with the aforementioned countries, need to adapt to this changing landscape:

Currency Risk Management: Develop strategies to manage currency fluctuations between the Rupee and their local currencies.

Banking Relationships: Establish relationships with banks that have SVAs in Rupees.

Invoice Adjustments: Adjust invoicing practices to accommodate Rupee-based settlements.

Compliance: Ensure compliance with relevant regulations and reporting requirements.

Supply Chain Diversification: Explore opportunities to diversify supply chains and leverage the growing Indian market.

Impact on Global Financial Markets & Forex Trading

The increasing use of the Rupee will inevitably impact global financial markets. We can anticipate:

Rupee Volatility: Increased trading volume could lead to greater volatility in the Rupee’s exchange rate.