India has made substantial financial contributions to the BRICS New Development Bank (NDB) and is actively engaging in externally aided development projects worth billions of dollars, according to Union Minister of State for Finance Pankaj Chaudhary. The remarks came in response to parliamentary queries about India’s involvement with the NDB and the feasibility of a BRICS joint currency, a topic gaining traction amid growing global discourse on reducing reliance on the US dollar.
Chaudhary highlighted India’s $2 billion contribution to the NDB, disbursed in seven installments from the fiscal year 2015-16 to 2021-22. Furthermore, he revealed that 20 externally aided projects are underway across India, involving a combined loan amount of $4.87 billion. These initiatives span crucial sectors such as transportation, water conservation, food security, and rural connectivity, reflecting the bank’s commitment to fostering sustainable development in member countries.
Addressing a Joint BRICS Currency
The concept of a joint BRICS currency has drawn attention in light of ongoing efforts by member nations to diversify their global trade mechanisms. However, Chaudhary referred to a report presented during Russia’s 2024 BRICS chairmanship that clarified the bloc’s stance. Titled “BRICS Chairmanship Research on the Improvement of the International Monetary and Financial System,” the report acknowledges the significant role of the US dollar in the global economy but emphasizes the need for competition and alternatives in cross-border payment systems.
According to the report, BRICS nations are not seeking to supplant the US dollar as the dominant medium of exchange. Instead, they aim to enhance the global financial architecture by offering alternative mechanisms that promote efficiency and inclusivity. The current infrastructure, the report argues, relies excessively on centralized settlement systems and reserve currencies, which no longer serve the demands of a 21st-century economy.
Shifting Financial Paradigms
The exploration of alternatives to the dollar has gained momentum following instances where the US leveraged its financial dominance, such as excluding Iran and Russia from the SWIFT network in 2012 and 2022, respectively. These actions underscored the vulnerabilities of countries dependent on the dollar-centric system and accelerated efforts to develop independent financial frameworks.
Despite these developments, the US dollar remains the cornerstone of global trade, facilitating over 90% of international transactions. Nevertheless, other currencies, including the euro, the Japanese yen, and the British pound, continue to play significant roles in global commerce.
Implications for BRICS and Beyond
India’s robust engagement with the NDB and its alignment with BRICS initiatives reflects a broader trend of nations seeking greater autonomy within the global financial system. By focusing on sustainable development and financial diversification, BRICS nations are positioning themselves as catalysts for an evolving, multipolar economic order.
As discussions around a joint BRICS currency and alternative payment infrastructures gain momentum, India’s strategic investments in the NDB and ongoing projects underline its commitment to shaping a resilient and equitable global economy.
