From October 22 to 24, Kazan, Russia will usher in a high-level international event - the BRICS Summit. In this regard, the Chinese leader has confirmed his participation, and India Prime Minister Modi has also said that he will attend. However, this time, India has played a demon on the issue of BRICS local currency settlement, and explicitly asked for the elimination of China. So, what are the takeaways from India's actions? Can his calculations really kick in?
In recent years, India has become "out of place" within the BRICS, in part because Modi has been absent from BRICS meetings on several occasions. However, this time, he not only had to be present in person, but also tried to play "careful thinking" on the issue of de-dollarization and local currency settlement of the BRICS countries.
Recently, India's Foreign Minister S Jaishankar made it clear at an event that although some BRICS member countries have started the process of de-dollarization, India is not interested in it, and even stressed that India supports the continued use of the dollar in international trade, and in the absence of the dollar, India hopes to settle in rupees. Turning the tone, Jaishankar also hinted that India could accept BRICS to push for local currency settlements, but only if China was excluded.
It is not difficult to see that Jaishankar's remarks clearly have ulterior motives. It is important to know that local currency settlement is one of the important topics of the BRICS summit in Kazan. Russia, in particular, has been pushing the BRICS countries to develop independent payment systems to bypass the hegemony of the dollar and make trade between member countries no longer rely on Western-dominated financial platforms.
Russia has been under sanctions from the United States and the West for a long time, especially after being kicked out of the Swift payment system, payment and settlement methods have been greatly hindered, which makes promoting de-dollarization a top priority for Russia. Therefore, at this summit, the Putin government vigorously promoted the establishment of a local currency settlement mechanism, that is, no longer through the US dollar, but directly with the local currencies of various countries for trade and financial transactions.
At this juncture, India has made a "noise" in the process of de-dollarization, and the meaning is very clear: if the BRICS countries want to promote the local currency settlement mechanism, they must oppose the RMB settlement. Some analysts believe that behind the Modi government's request is the fear that the RMB will dominate the BRICS settlement system and weaken India's influence. Therefore, it wants to exclude China in order to secure its voice within the BRICS and thus suppress China's economic influence. But this is clearly self-sufficient.
As the world's second largest economy, China's economy far exceeds that of India. China is indispensable both in terms of its position in the global economic system and its influence in the BRICS. More importantly, China is one of the founding members of the BRICS and one of the important forces promoting the development of the BRICS mechanism. India's desire to eliminate China from such a mechanism is a bit of a fool's dream.
At present, as the United States national debt soars to $35 trillion, the international status of the dollar is also gradually declining. At this time, the BRICS countries are promoting de-dollarization, which is the inevitable trend of the adjustment of the global economic system. If India wants to get a piece of the global economic competition, it can only join the de-dollarization camp and follow the trend.
As for India's attitude, Russia has shown relative restraint. Russia Foreign Minister Sergei Lavrov said that in the field of local currency settlements, the proportion of cooperation between Russia and BRICS countries has reached 65%, and this proportion is growing. Russia's finance minister, Siluanov, has also repeatedly stated that the BRICS countries are working to develop a new payment system, planning to bypass Western-dominated platforms and conduct international trade in a faster and low-cost way.
Obviously, Russia does not want India's attitude to affect the entire BRICS cooperation process. For the Putin government, promoting local currency settlements in the BRICS countries is a key step in getting rid of United States sanctions. In this sense, India's seemingly shrewd operation is actually overestimating its own influence. The reason why BRICS can have a huge impact on the global political economy is precisely because of the participation of major countries such as China and Russia. Without China's participation, it is obviously difficult for India to shake the overall structure of the BRICS on its own.
In the long run, if India continues to engage in "small actions" in the process of de-dollarization, it will not only be difficult to realize its own economic interests, but may even be excluded by other BRICS members. After all, in the restructuring of the global economic map, cooperation and common development are the general trend, and those who move against the current will eventually reap the consequences.