By Haider Abbas
The war of Russia and Ukraine is shaping the world by its own necessities, which is making nations, which are almost at daggers-drawn to each other i.e. India and China, start to find unanimity in certain areas, which all together is to be nothing short of a surprise! Guess to whom? US. Now, India too has joined the group, on the lines of Russia and China, to probe for an alternate to US Dollar, as it has been learnt that India and the Kingdom of Saudi Arabia, have initiated to discuss oil purchase in terms of Indian Rupee and Saudi Riyal. India is the fourth largest buyer of KSA oil in the world.
The world knows it well that Russia and China have gone much ahead with grooming the possibilities of a market to displace USD, and there are speculations as to how China, which is a 17.7 trillion dollar economy, only second to US, is set to upstage the dollar monopoly, as China’s currency Renminbi is only limited to 3 per cent of the global trade in comparison to 87 per cent of the market share by the USD. India which is a bête noir to China on many counts, and is a considered friend of US against China, yet India has its own long-term interests, which is not to ride piggyback on USD, but instead make Indian Rupee (INR) strong, as INR has slid to a record low to USD and also that India’s foreign reserves have shrunk to 80 billion USD.
India has caught up with China which has been fast transforming itself towards Yuan based international transactions, particularly with KSA, and India has now started to groom for the same, as quite understandably India will be able to save billions of USD in terms of foreign exchange, which otherwise, is on a fast dwindling side. Reserve Bank of India, in fact has given a green-signal towards the implementation to de-dollarise the Indian trade and economy, as India ought to cut the dollar-involvement so as to save inflation, economy and currency value, but the big question is also to find as to how many nations would be ready to trade in Rupee? India, in fact had to be forced to take this step, owing to Russia-Ukraine war, as a wake-up call, as US and European Union, with a click of a mouse, de-listed Russia from SWIFT mode of transfer of money, and this, may occur in context to any nation in the world, including India, as US and EU are surely, to look towards ‘their’ interests. Hence, India too, has to avert any such disaster, and muster to change to ‘Rupee-transactions’ even if it takes decades for foster for it.
The Russia-Ukraine war made India to not to bog down to US dictates as US wanted India to shun Russian oil, but India made the best of it, and bought Russian oil at heavily slashed prices and that too in Ruble-Rupee terms, which was yet again a snigger to US dollar monopoly. But, ironically, India did this all while remaining in US stride too! India stamped its interest through displaying its diplomatic and economic autonomy. India had to take-up the cudgels as a ‘deterrence’ to US overall wherewithal of economic heavyweight, and it is here, that India, Russia and even China join the club, of anti-dollar campaign, despite having divergent reasons for it.
India is now to fortify its defense-mechanism and strategize the de-dollarization of its economy as after the outbreak of Russia-Ukraine war, there is also a possibility that Russia may initiate more wars to reclaim its lost states and China is also on a brink of war over its claim on Taiwan and all the while US is to sit in the opposite camp. While, also at the same time, China and India are locked-up with disputes in the Himalayas, with US standing by the Indian side, yet, India, is to find-a-way-out to not to be subsumed by the dollar impact, as in the past few months, the INR has taken to a beating as never before! Here, India ought to take a cue from Russia, which despite the war, has come-up with a more powerful economy, even in the wake of all kinds of economic etc sanctions slapped on it.
Russia, after it had annexed Crimea in 2014, introduced an alternative to SWIFT system by its own MIR system for trade and shifted USD in Russia’s exports to Brazil Russia India China South Africa (BRICS) which crashed dollar to no ends. Today USD role in Russian exports in just around 10 per cent compared to 95 per cent in 2013 in BRICS. This has worked remarkably well, as currencies of BRICS also in the same way got strengthened in comparison to dollar. The world has come to a fact that there is an alternative to dollar set by the Russian example. India ought to imbibe on it.
How India is to take up this uphill task is what time is to tell, as a great percentage of the overall trade of India is dollar based, and it is not very likely to happen, even perhaps, after five-decades, that India might to able to unshackle the dollar, as the only dominant medium of trade and commerce, The KSA government has started to discuss-the-same, but KSA too has been traditionally an old ally of US. Indian effort at this moment will need more momentum as USD value is on the increase and a very strong will in the political establishment of India can ‘find-it-through’ or else everything will just remain a ‘discussion’ with no reverberations as such to send an alarm signal inside the US total dollar hegemony. KSA, for that matter, may be also toiling with a Rupee-Riyal idea as there have been some reports, in the recent past, that KSA is having a bit of an uneasy-relationship with US, despite US President Joseph Biden visit to the oil kingdom.
The world stands today on a very precarious situation as KSA, UAE, US and Israel are raring for an attack on Iran, Azerbaijan-Armenia have restarted their skirmishes, right under the nose of Russia, and China is flexing its muscles over the US provocations on Taiwan, while India is pitched-up against China as well. How will India navigate its falling-INR, juxtaposed to USD is what time would tell. Nothing in immediate future is however expected to happen. Will India support BRICS reserve-currency as suggested by China? To nail USD for all times to come!
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The writer is a former UP state Information Commissioner and writes on international politics.
US never tolerates anti Dollar policies. I am worrying about India’s future which is directly dependent corporate Dollars mainly IT industry …