BRICS Countries Will Settle Trade in Indian Rupees? Heres Whats Really Happening

Introduction

You may have come across bold headlines claiming: “BRICS countries will now settle trade in Indian rupees.” Sounds like a game-changing moment, doesn’t it? But as with many global finance stories, the truth is a little more layered.

Yes, the Indian rupee is gaining ground in international trade. Yes, BRICS nations (Brazil, Russia, India, China, and South Africa) are discussing alternatives to the U.S. dollar. But no, it’s not as simple as all BRICS members suddenly deciding to ditch the dollar for the rupee.

In this article, we’ll break down what’s actually happening right now—focusing on RBI’s recent steps, Russia’s growing rupee trade, India’s push for rupee internationalization, and the ongoing BRICS discussions around local currency settlements. By the end, you’ll have a clear picture of what’s fact, what’s half-true, and what’s still just an idea on the table.

1. What Sparked the Headlines About Rupee Trade?

Recently, several news outlets suggested that for the first time, BRICS countries will trade using the Indian rupee. That’s partly misleading. The story gained traction because of fresh moves by India’s central bank and ongoing BRICS currency discussions. But in reality, India has already been settling trade with Russia in rupees since 2022.

So, instead of being a brand-new revolution, this is more like adding fuel to an already burning fire.

2. RBI’s Role: Simplifying Rupee-Rouble Settlements

The Reserve Bank of India (RBI) has been busy tweaking rules to make rupee settlements more attractive. Recently, it allowed banks to open Special Rupee Vostro Accounts (SRVAs) without needing prior approval.

Think of SRVAs as “storage wallets” for foreign banks, holding rupees earned from trade. The RBI also permitted these rupee balances to be invested in Indian government securities, making them more useful.

This move is especially helpful for Russian oil payments, where multiple currency conversions can be a headache.

3. The Growth of India-Russia Rupee Trade

Russia has become the testing ground for India’s rupee push. According to Sberbank, Russia’s largest lender, rupee-rouble payments in 2024 were double the levels of 2023.

Indian businesses are getting more comfortable holding rupees abroad, and Russian exporters are warming up to the idea of investing rupee deposits in India’s bond market.

This rising comfort level shows that the rupee is slowly but surely becoming more acceptable in global trade.

4. Why Russia Matters in India’s Currency Push

Why start with Russia? Because sanctions after the Ukraine conflict limited Moscow’s access to dollars and euros. That left Russia looking for alternatives—and India, a major buyer of Russian oil, provided the perfect testing ground.

It’s like finding a willing dance partner when others refuse to join you. Russia needed a new settlement route, and India wanted to boost rupee usage. A win-win scenario.

5. The Bigger Goal: Internationalizing the Rupee

India’s vision goes beyond just Russia. Since 2022, it has been working steadily to internationalize the rupee—making it a trusted trade currency outside its borders.

Agreements have already been set up with countries like the UAE, Maldives, and Indonesia, allowing rupee settlements for trade. RBI is also in talks with neighbors like Bangladesh, Bhutan, Nepal, and Sri Lanka for rupee lending arrangements.

The ultimate aim? To reduce dependence on the dollar and give Indian companies more flexibility in cross-border trade.

6. Bilateral Deals Beyond Russia

The India-UAE deal is especially noteworthy because the UAE is a major energy supplier and a global trade hub. Using rupees for even a fraction of trade with Dubai strengthens India’s case for rupee internationalization.

Smaller countries in South Asia also see benefits: rupee settlement can ease trade costs and reduce reliance on the dollar, which often creates exchange-rate risks.

7. What Happened at the BRICS Summit in 2024

At the 16th BRICS Summit in Kazan (Oct 2024), members agreed to increase local-currency trade and study the creation of an independent settlement system.

This doesn’t mean BRICS is suddenly adopting the rupee—it means all members are considering using their owncurrencies more. In other words, China could push the yuan, Russia could stick with the rouble, and so on.

So while the rupee is part of the discussion, it’s not the exclusive currency for BRICS trade.

8. Understanding BRICS Pay – The Proposed Payment System

Have you heard of BRICS Pay? It’s the idea of creating a cross-border payment system independent of the dollar. Think of it like a PayPal or SWIFT alternative but designed just for BRICS members.

Right now, it exists as a concept. The idea is supported, but it’s not live yet. For now, BRICS members continue to rely on existing systems while exploring this option.

9. Is This the End of the Dollar? Not Quite

A big misconception is that moves like these mean the dollar’s dominance is finished. In reality, the U.S. dollar still accounts for nearly 60% of global forex reserves and dominates global oil trade.

Local currency settlements, including the rupee, are more about creating alternatives and reducing risk—not overthrowing the dollar overnight.

10. India’s Position on De-Dollarisation

India has been clear: it’s not aiming to replace the dollar completely. Instead, the goal is to de-risk trade and give businesses more options.

For example, if a country faces sanctions or dollar shortages, rupee settlements provide a safety net. But India is not campaigning for a “dollar-free” world.

11. Why Local-Currency Trade Matters for BRICS

Trading in local currencies helps countries:

1. Reduce exposure to dollar exchange rate swings.
2. Save transaction costs by cutting out multiple conversions.
3. Strengthen bilateral relations.

For countries like South Africa or Brazil, it’s a way to avoid being caught in U.S. monetary policy changes.

12. Challenges Facing Rupee-Based Settlements

Of course, it’s not all smooth sailing. Challenges include:

1. Limited global liquidity of the rupee.
2. Hesitation from exporters about holding rupees.
3. Infrastructure gaps in payment systems.

Until these are solved, the rupee’s role will grow slowly rather than explosively.

13. Benefits for Indian Businesses and Economy

For India, increasing rupee settlements has several advantages:

1. Reduced demand for foreign exchange.
2. More global exposure for Indian bonds and securities.
3. Stronger financial ties with trading partners.

It also boosts India’s soft power—every country that uses the rupee strengthens its position globally.

14. What Lies Ahead for BRICS Currency Cooperation

BRICS members will likely keep moving toward local-currency trade, but each with its own priorities. China wants the yuan to grow, Russia is comfortable with rupees, and others will balance based on trade patterns.

The long-term vision might be a multi-currency basket or a shared digital platform like BRICS Pay. But that’s still a work in progress.

15. Bottom Line: Separating Hype from Reality

So, is it true that “BRICS countries will now settle trade in rupees”? Not exactly.

1. Fact: India and Russia already trade in rupees, and that’s expanding.
2. Partial truth: BRICS supports local-currency trade, but not rupee-only.
3. Work in progress: BRICS Pay is still an idea, not reality.
4. Clear stance: India isn’t aiming for complete de-dollarisation.

The real story is about gradual steps, growing trust, and giving businesses more tools—not a sudden overthrow of the dollar system.

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FAQs

1. Are BRICS countries replacing the dollar with the Indian rupee?
No, BRICS isn’t replacing the dollar with the rupee. The focus is on expanding trade in local currencies, including the rupee, but not exclusively.

2. What is a Special Rupee Vostro Account (SRVA)?
An SRVA is an account that allows foreign banks to hold rupees earned from trade. These funds can now also be invested in Indian government bonds.

3. Is BRICS Pay operational yet?
No, BRICS Pay is still under discussion. It’s a proposed payment system for cross-border trade but hasn’t been launched.

4. Why is Russia key to India’s rupee push?
Sanctions limited Russia’s access to dollars, making rupee settlements attractive. India, being a major buyer of Russian oil, provided a practical testing ground.

5. Does India want full de-dollarisation?
No, India’s aim is to reduce risks by diversifying trade settlement options. It wants the rupee to play a bigger role, but not to eliminate the dollar completely.

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