Local Currency Trade: India rules out Brics currency proposal, backs local currency trade settlements

Leaders pose for a family photo during the Brics summit in New Delhi (Picture credit: Reuters)

There is currently no proposal to introduce a common Brics currency, while discussions on settling bilateral trade in local currencies will continue as a way to reduce transaction costs, Sudhakar Dalela, secretary (economic relations) in the ministry of external affairs, said on Saturday.“There is no proposal in the Brics for a Brics currency, as of now,” Dalela said while briefing the media after the 18th Brics Summit in New Delhi.His comments came as Brics countries continue discussions on strengthening cross-border payments and making trade settlements more efficient among member countries.

Local currency settlement to continue

Dalela said discussions on settling trade in local currencies had been underway in Brics for some time and were not a new initiative.“Discussion on trade settlement in local currency has been underway for some time in Brics; it’s not a new subject,” he said.He described local currency settlement as a practical mechanism for bilateral trade and said it was not intended to replace the existing global payment and settlement framework.“We believe local currency settlement is a practical mechanism to reduce transaction cost in bilateral trade. This has been encouraged as complementary to global payment and settlement system, improving overall global trade across nations,” Dalela said.The issue of Brics countries using local currencies has also drawn criticism from US President Donald Trump. Last year, Trump warned that countries pursuing efforts to reduce reliance on the US dollar could face punitive tariffs, describing Brics as a grouping seeking to challenge the dominance of the US currency.The New Delhi Declaration also acknowledged ongoing discussions on promoting trade settlements and investments using Brics local currencies, while respecting national priorities and recognising that there is no one-size-fits-all approach.The declaration said the Brics Payment Task Force (BPTF) has been studying the cross-border interoperability of payment and messaging channels.It encouraged the task force to continue working towards practical payment solutions that are “fast, low-cost, more accessible, efficient, transparent, and safe”.

Push for easier cross-border payments

The focus on local currency settlements forms part of the wider Brics effort to improve cross-border trade and payments.Dalela’s remarks, however, made clear that these discussions are not currently linked to the creation of a single Brics currency.At the Brics Business Forum leaders’ session on Friday, Prime Minister Narendra Modi, Russian President Vladimir Putin and Iranian President Masoud Pezeshkian had also stressed greater economic cooperation and the wider use of local currencies.Pezeshkian made a strong pitch for increasing the use of national currencies in trade among Brics members and said this should be accompanied by mechanisms to manage currency risks and reciprocal settlements.“Since the current financial system is vulnerable to political shocks due to its concentration on a limited number of currencies,” Pezeshkian said, the New Development Bank should become a key source of financing for infrastructure and energy projects through local-currency lending and guarantees to attract private capital.

Brics declaration targets trade barriers

The New Delhi Declaration also raised concerns over unilateral tariffs and other trade-restrictive measures.Brics leaders said the multilateral trading system “has long been at a crossroads” and warned that the proliferation of trade restrictions could disrupt global supply chains and create uncertainty for international economic activity.“We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules,” the declaration said.The grouping also opposed unilateral, punitive and discriminatory measures such as carbon border adjustment mechanisms, saying they could disproportionately affect developing economies.Brics reaffirmed its support for reform of the World Trade Organization and called for a non-discriminatory, open, equitable, transparent, fair, inclusive, predictable and rules-based multilateral trading system with the WTO at its core.It also advocated the immediate restoration of a fully functioning two-tier binding WTO dispute settlement mechanism.

Eight months of work under India’s chairship

Dalela said the 18th Brics Summit followed eight months of work under India’s chairship, involving more than 350 meetings across thematic clusters, ministerial meetings, working groups, business sessions and other initiatives.He said summit discussions also covered the impact of ongoing conflicts and economic uncertainties, with leaders underscoring the importance of dialogue, diplomacy and peaceful resolution of differences.India is hosting the 18th Brics Summit in New Delhi under its 2026 chairship, guided by the theme “Building for Resilience, Innovation, Cooperation and Sustainability.”