Goyal urges Brics to trade in local currencies, link payment systems

The commerce minister also called for easier market access, simpler regulatory procedures and deeper cooperation in digital trade, critical minerals and resilient supply chains

Commerce and Industry Minister Piyush Goyal on Friday called for trade in local currencies among Brics nations and integration of their respective instant payment systems.

 

“I would urge the Brics members and partner countries to link our payment systems, trade in each other’s local currencies, make digital trade global, and build together for the future of emerging technologies,” Goyal said at Brics Business Forum ahead of the two-day Brics Summit under India’s presidency, that begins in New Delhi on Saturday.

 

India has already linked its instant payment system, Unified Payments Interface (UPI), with 11 countries globally and aims to expand it further. Among Brics members, India has integrated UPI with the United Arab Emirates’ (UAE’s) fast payment system Aani.

 

 

New Delhi has also explored trade settlement in local currency with Russia and the UAE among Brics members.

 

The Brics nations had envisaged a common currency for trade settlement three years ago, but the idea has taken a back seat following US President Donald Trump’s opposition and tariff threats.

 

However, facilitating trade settlement in local currencies to maintain an alternative option alongside the dollar remains a key agenda item for Brics nations. Besides, having an alternative option along with the dollar is a priority for the grouping, considering two of the member economies — Russia and Iran — remain susceptible to economic sanctions.

 

In fact, New Delhi explored local currency settlement with Russia in the aftermath of the Ukraine war as Western economies banned major Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the international payment messaging system, as part of economic sanctions on Moscow.

 

Russia has restructured its trade over the past three years and now settles the majority of its exports with partner countries in local currencies, the country's Minister of Economic Development Maxim Reshetnikov, who is in New Delhi for the summit, said at the Brics Business Forum.

 

“Three years ago, dollar and euro accounted for 85 per cent of export settlements for Russia. The figure now stands at 11 per cent,” Reshetnikov said.

 

“An alternative international financial system became our key leverage. Today it links thousands of banks of many countries.”

 

Reshetnikov also suggested two initiatives for the upcoming summit: a Brics Green Exchange and a Brics Special Economic Zone Association.

 

“Brics countries are among the world’s leading producers and consumers. But they still rely on price benchmarks that reflect the interests of entirely different markets. We urgently need an independent mechanism for strategic agricultural commodities,” he said.

 

“Russia prepared a detailed plan to establish the Brics Green Exchange: a unified trading platform where producers, traders and buyers can conclude transactions directly. Now, we call on partner feedback on public and private level.”

 

India’s Minister of External Affairs S Jaishankar, who was also present at the Brics Business Forum, said that collaboration among members in trade, services, and technology is increasingly significant amid a volatile geopolitical landscape.

 

He also emphasised the need for resilient supply chains and energy security “at a time when global, political, and economic order is under churn, and volatility, uncertainty, and complexity have become the defining features of the world around us".

 

“Resilience, therefore, is an essential partner in translating the possibilities of Brics into concrete results,” Jaishankar said. “For Brics, particularly, higher economic activity, higher economic security, means greater self-reliance. The objective is to strengthen our ability to absorb shocks while remaining connected and competitive.”