BRICS may be facing a potential rift after India publicly announced its decision to opt out of the bloc’s de-dollarization initiative.

In a recent statement, the Indian government clarified that it has no interest in de-dollarization or in any effort aimed at undermining the dominance of the U.S. dollar.

This position sharply contrasts with that of its BRICS counterparts, particularly Russia and China, who have been actively advocating for alternatives to the dollar in global trade, including the introduction of a unified BRICS currency.

External Affairs Minister S. Jaishankar reaffirmed India's stance, stating that distancing from the dollar has never been part of India’s economic, political, or strategic agenda.

“We have never actively targeted the US dollar. That’s not part of either our economic policy or our political or strategic policy.”

Why India Is Opting Out

While several emerging economies are accelerating efforts to reduce dependence on the U.S. dollar, India remains deliberately cautious, guided by economic pragmatism and strategic foresight.

One of the core reasons behind India’s reluctance is its large holdings of dollar-denominated foreign exchange reserves, which serve as a cornerstone of financial stability.

Any abrupt departure from the dollar, experts warn, could disrupt this balance and introduce unnecessary volatility into India’s macroeconomic environment.

India also enjoys strong trade and strategic ties with the United States, especially in the technology, energy, and defense sectors.

These partnerships are critical to India’s long-term development and national security goals. A shift away from dollar-based trade could jeopardize these alliances and introduce friction in bilateral cooperation.

From a monetary policy perspective, Indian regulators are wary that a sudden pivot from the dollar could deter foreign investment and destabilize capital flows.

The Reserve Bank of India (RBI) has historically favored a cautious approach to currency management, aimed at sustaining investor confidence and maintaining economic stability.

Unlike countries such as Russia—isolated by Western sanctions—or China, which seeks global financial dominance, India sees no immediate geopolitical or economic gain in challenging the dollar’s supremacy.

A Rift Within BRICS

India’s refusal to align with the bloc’s de-dollarization vision may spark internal tensions within BRICS, potentially undermining the alliance’s ability to present a unified front on global monetary reform.

Meanwhile, Russia and China are pressing ahead with their anti-dollar efforts. Russia is strengthening partnerships with nations open to trading in rubles, while China continues its campaign to internationalize the yuan.

India’s firm support for the dollar casts doubt on the feasibility of a common BRICS currency, or on any rapid de-dollarization within the Global South.

As one of the world’s largest and fastest-growing economies, India’s decision sends a powerful message—that economic stability and established financial relationships will not be sacrificed for ideological or geopolitical experimentation.