What happened?
In a post nearly identical to the one made in November, ahead of the 2024 US Presidential elections, President Trump stated, “We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs…”
Why it matters to India:
As part of BRICS, India has somewhat backed the promotion of trade in local currencies, and the bloc has discussed ways to reduce reliance on the US dollar for many years. Such efforts were intensified in the wake of US sanctions on Russia in the aftermath of the Ukraine war and have been largely led by Moscow and Beijing. The global debate over the possibility of de-dollarization assumed further significance as BRICS expanded last year to include Egypt, Ethiopia, Indonesia, Iran and the UAE.
However, India is largely against a BRICS currency, in part due to its warines that such a move may strenghten China’s already considerable economic dominance within the group. On the other hand, President Trump’s now-repeated threat must also be seen in the context of a possible reconfiguration in India-US trade ties as New Delhi negotiates with a new White House. In the past, Trump has called India a “very big abuser” of trade policies. Meanwhile, India enjoys a trade surplus of $35.3 billion with the US, making it one of it’s most vital economic partnerships.