In March 2025, India's External Affairs Minister S. Jaishankar told an audience in London: "I don't think there's any policy on our part to replace the dollar. The dollar as the reserve currency is the source of global economic stability, and right now what we want in the world is more economic stability, not less." The statement was precise, calibrated, and strategically important — because it came as India was preparing to host the 2026 BRICS Summit, chair a bloc that includes China and Russia, and manage a global currency debate it has no interest in leading but cannot afford to ignore.

The dollar's position in the global financial system is changing. Not collapsing — the dollar remains the currency of approximately 57% of global foreign exchange reserves, 88% of all currency transactions, and 54% of global export invoicing. But its share of global reserves has fallen from 73% in 2001 to 57% today — a 16 percentage point decline over two decades that reflects a structural, not cyclical, shift. Understanding what that shift means for India — and what India's optimal positioning is as the currency landscape evolves — is one of the most consequential economic policy questions of the current decade.

The Architecture of Dollar Decline

The dollar's decline is being driven by three overlapping forces that reinforce each other.

The first is weaponisation. The United States' use of dollar-denominated financial infrastructure — SWIFT access, correspondent banking relationships, dollar-clearing — as a sanctions tool has prompted countries across the developing world to ask a question that would have seemed academic before 2022: what happens to our economy if we are removed from the dollar system? Russia's removal from SWIFT following its Ukraine invasion demonstrated that the answer is severe economic disruption. The lesson was absorbed not just by Russia's allies but by every country that maintains any degree of strategic independence from Washington. Building alternative payment infrastructure is no longer an ideological preference. It has become a risk management imperative.

The second is the emergence of viable alternatives. The yuan's share of global reserves remains modest — under 5% of global reserves compared to the dollar's 59% — but China's Cross-Border Interbank Payment System provides an alternative financial messaging infrastructure that now processes a significant share of yuan-denominated trade. BRICS Pay, a decentralised payment messaging system, was discussed at the October 2024 Kazan Summit as a means of facilitating transactions in local currencies. Bilateral currency swap arrangements — China has established these with over 40 central banks — are creating the liquidity infrastructure that makes non-dollar trade settlement operationally feasible.

The third is the accumulation of gold. BRICS+ central banks added nearly 800 metric tonnes of gold in 2025 alone, with combined BRICS gold reserves exceeding 6,000 tonnes — approximately 20–21% of total global central bank gold reserves. India holds 880 tonnes. The coordinated buying is not incidental — it is a hedge against dollar exposure that signals a fundamental reassessment of reserve management strategy across the developing world.

India's Specific Position

India's relationship with the dollar's decline is more complex than most BRICS members. India is not a sanctions-threatened economy seeking dollar alternatives as an insurance policy. It is a country with deep integration into dollar-denominated trade and capital markets — its exports are predominantly dollar-invoiced, its foreign institutional investors operate in dollar frameworks, and its sovereign bonds are priced against dollar benchmarks.

At the same time, India has made pragmatic moves toward non-dollar settlement that reflect genuine economic logic rather than political positioning. The rupee-ruble oil trade — through which India has been purchasing discounted Russian crude in rupees — accumulated significant Vostro account balances at Russian banks that became, paradoxically, a liquidity management problem when India could not easily deploy the accumulated rupees. The lesson was instructive: rupee internationalisation requires not just the political will to settle in local currency but the financial depth to make the accumulated rupee balances useful. India has 22 rupee trade settlement agreements. The architecture is ahead of the underlying financial depth.

The 2026 BRICS Presidency

India's 2026 BRICS presidency is the most consequential test of its currency positioning. China and Russia will push for accelerated de-dollarisation — whether through BRICS Pay expansion, a common unit of account, or bilateral swap line coordination. India will resist proposals that are interpreted as anti-dollar provocations by Washington, whose tariff and trade relationship with India India cannot afford to jeopardise.

The optimal India position — which Jaishankar's London statement previewed — is to support financial architecture diversification without endorsing dollar replacement as an explicit goal. Expanding local currency settlement for intra-BRICS trade, deepening New Development Bank lending in member currencies, and building BRICS Pay's technical infrastructure are all achievable without the geopolitical confrontation that a formal anti-dollar stance would trigger.

A multipolar currency world is coming — slowly, unevenly, and without the dramatic rupture that de-dollarisation advocates predict. India must position itself as a country that benefits from greater financial architecture diversity while maintaining the dollar relationships that its own economic integration requires. The Jaishankar formulation is right. The task is to translate it into the specific decisions of the BRICS presidency.

The Hind covers policy, power, and strategic affairs from India's perspective. Views expressed are analytical and editorial.