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India has contributed nearly $2 billion to the BRICS New Development Bank (NDB), and 20 externally aided projects, with loans amounting to $4,867 million in areas such as transportation, water conservation, food management, and connectivity in rural areas, are currently ongoing in the country, Union Minister of State for Finance Pankaj Chaudhary said on Monday.
Chaudhary’s response followed a Lok Sabha question regarding the government’s stance on the initiative for a joint currency for BRICS nations and India’s contribution to the BRICS Bank. The queries were prompted by concerns over President-elect Donald Trump’s threats of imposing 100 per cent tariffs on BRICS nations as a reaction to their efforts to reduce reliance on the US dollar in international trade.
“India’s contribution to the BRICS New Development Bank (NDB) stands at $2 billion, paid in seven instalments from the fiscal year 2015-16 to 2021-22. As of now, 20 externally aided projects with loan amounts of $4.867 million funded by the NDB are ongoing in India,” Chaudhary stated.
However, regarding the question of a joint currency, the minister referred to a report on the international financial system prepared by Russia during its BRICS chairmanship. “During 2024, under its BRICS Chairmanship, Russia prepared a report, ‘BRICS Chairmanship Research on the Improvement of the International Monetary and Financial System.’
The report emphasises that BRICS nations recognise natural constraints and the will of the free market. Thus, BRICS “do not seek to replace the US dollar as a medium of exchange” due to its significant share in the global economy. Instead, BRICS aims to “offer a viable alternative that will aid the market in its perpetual mission for efficiency” and foster greater prosperity, promoting universally beneficial and inclusive economic globalisation.
Nevertheless, the report highlighted that the current cross-border payments infrastructure “lacks competition” and struggles to meet participants’ demands. It stated that the prevailing reliance on centralised settlement mechanisms and reserve currencies for cross-border payments represents a “legacy overhang” that is no longer optimal for the 21st century.
International trade experts have noted that ever since the US weaponised the global financial infrastructure by excluding Iran (in 2012) and Russia (in 2022) from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), countries worldwide have been seeking to reduce their dependence on the US dollar and the US-led global financial system.
The US dollar continues to dominate global trade, accounting for over 90 per cent of transactions. However, it is not the only currency used internationally. Other convertible currencies, such as the Japanese yen, the euro, and the British pound, also play integral roles in global commerce.