{"id":84736,"date":"2026-09-12T18:26:32","date_gmt":"2026-09-12T12:56:32","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=84736"},"modified":"2026-09-12T18:27:29","modified_gmt":"2026-09-12T12:57:29","slug":"brics-local-currency-trade","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/12-09-2026\/brics-local-currency-trade","title":{"rendered":"BRICS Nations Should Link Payment Systems, Trade in Local Currencies"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has urged <strong>BRICS members and partner countries<\/strong> to deepen economic integration through <strong>local-currency trade<\/strong>,<strong> linked payment systems<\/strong> and easier market access ahead of the <strong>18th BRICS Summit in New Delhi.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About Trade in Local Currencies &amp; De-Dollarisation<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Trade in local currencies<\/strong> means settling cross-border transactions directly in the currencies of trading countries rather than converting them into a vehicle currency such as the US dollar.<\/li>\n\n\n\n<li><strong>De-dollarisation<\/strong> refers to reducing excessive dependence on the US dollar in <strong>trade invoicing, payments, reserves and international finance<\/strong>.<\/li>\n\n\n\n<li>BRICS&#8217; approach to create greater <strong>currency diversification and payment-system autonomy<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Significance of Local-Currency Trade<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lower Transaction Costs:<\/strong> Reduces repeated currency conversions and dependence on intermediary currencies.<\/li>\n\n\n\n<li><strong>Greater Resilience:<\/strong> Alternative payment channels can reduce vulnerability to external financial disruptions.<\/li>\n\n\n\n<li><strong>Boost to Intra-BRICS Trade:<\/strong> Easier settlements can convert economic complementarities into commercial partnerships.<\/li>\n\n\n\n<li><strong>Financial Autonomy:<\/strong> Provides emerging economies greater policy space amid geopolitical and sanctions-related uncertainties.<\/li>\n\n\n\n<li><strong>Digital Integration:<\/strong> Linking UPI and other payment systems can promote faster, cheaper and more inclusive cross-border transactions.<\/li>\n\n\n\n<li><strong>Supply-chain Diversification:<\/strong> Facilitates trade in critical minerals, raw materials and manufactured goods.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Concerns and Challenges<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Exchange-rate volatility<\/strong> can create risks for exporters and importers.<\/li>\n\n\n\n<li>Local currencies may have <strong>limited convertibility and liquidity<\/strong>.<\/li>\n\n\n\n<li>Persistent <strong>trade imbalances<\/strong> can make accumulation of partner currencies difficult.<\/li>\n\n\n\n<li>Differences in financial regulations, data standards and payment infrastructure hinder interoperability.<\/li>\n\n\n\n<li>Dollar-based markets retain advantages in <strong>depth, liquidity and global acceptability<\/strong>.<\/li>\n\n\n\n<li>Greater digital connectivity raises concerns over <strong>cybersecurity, data protection and financial stability<\/strong>.<\/li>\n\n\n\n<li>Excessive financial fragmentation could increase transaction complexity instead of reducing it.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward: Strengthening Measures<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>BRICS should pursue <strong>interoperable payment systems, currency-swap arrangements, transparent settlement mechanisms and common digital standards<\/strong>, while strengthening financial regulation and cybersecurity.<\/li>\n\n\n\n<li>The <strong>BRICS Economic Partnership Strategy 2030<\/strong>, BRICS Connect, the <strong>BRICS incubator network<\/strong> and <strong>BRICS Startup Innovation Fund<\/strong> can support deeper integration.\u00a0<\/li>\n\n\n\n<li>Cooperation should preserve the <strong>WTO at the core of the multilateral trading system<\/strong>, while improving logistics, affordable MSME finance, trade facilitation and mutual recognition of standards.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India&#8217;s 2026 BRICS Chairship theme <strong>\u2018Building for Resilience, Innovation, Cooperation and Sustainability\u2019<\/strong> provides an opportunity to build a more diversified.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#fff2cc\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\"><strong>About BRICS<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>BRICS<\/strong> is a major platform of <strong>emerging economies<\/strong> and the <strong>Global South<\/strong>, initially comprising <strong>Brazil, Russia, India and China<\/strong>, with <strong>South Africa joining in 2010<\/strong>.<\/li>\n\n\n\n<li>Its expansion has substantially increased its demographic, economic and geopolitical weight.<\/li>\n\n\n\n<li>BRICS seeks greater cooperation in areas such as <strong>economy, finance, trade, technology, development and global governance<\/strong>, while advocating a more representative and multipolar international order.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Historical Evolution: From BRIC to BRICS+<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>BRICS has evolved from an economic grouping into a broader platform for <strong>strategic autonomy, development cooperation and reform of global governance<\/strong>.\n<ul class=\"wp-block-list\">\n<li><strong>2001:<\/strong> Economist <strong>Jim O\u2019Neill <\/strong>coined the term <strong>BRIC<\/strong> for Brazil, Russia, India and China.<\/li>\n\n\n\n<li><strong>2009:<\/strong> First BRIC Summit was held at <strong>Yekaterinburg, Russia<\/strong>.<\/li>\n\n\n\n<li><strong>2010:<\/strong> South Africa joined, creating <strong>BRICS<\/strong>.<\/li>\n\n\n\n<li><strong>2024:<\/strong> <strong>Egypt, Ethiopia, Iran, Saudi Arabia and UAE<\/strong> became full members.<\/li>\n\n\n\n<li><strong>2025:<\/strong><strong>Indonesia<\/strong> joined BRICS as a full member, further widening its Global South representation.\n<ul class=\"wp-block-list\">\n<li>Also, Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan and Vietnam joined BRICS as Partner Countries.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>2026:<\/strong> India assumes the chairship and hosts the <strong>18th Summit in New Delhi<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Proposals at BRICS Business Forum 2026<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>At the BRICS Business Forum, <strong>India\u2019s Commerce and Industry Minister <\/strong>called for:\n<ul class=\"wp-block-list\">\n<li><strong>Opening markets<\/strong> to each other&#8217;s products, particularly <strong>raw materials and critical minerals<\/strong>, with resilient supply chains that \u2018run both ways\u2019.<\/li>\n\n\n\n<li>Reducing <strong>non-tariff measures (NTMs)<\/strong>, which impose higher export costs than tariffs for <strong>88% of countries<\/strong>.<\/li>\n\n\n\n<li><strong>Linking payment systems<\/strong> and expanding trade in <strong>local currencies<\/strong>.<\/li>\n\n\n\n<li>Leveraging India&#8217;s <strong>UPI<\/strong>, now accepted in <strong>11 countries<\/strong>, for wider digital trade.<\/li>\n\n\n\n<li>Greater cooperation in <strong>agriculture, agri-tech, pharmaceuticals, engineering goods, electronics, automobiles, auto components and services<\/strong>.<\/li>\n\n\n\n<li>Increasing participation of <strong>women-led enterprises<\/strong> in BRICS exhibitions and trade fairs. Over <strong>45% of India&#8217;s 250,000 recognised startups<\/strong> have at least one woman partner\/director.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p><\/p>\n\n\n\n<p><a href=\"https:\/\/www.thehindu.com\/business\/Economy\/brics-nations-should-link-payment-systems-trade-in-local-currencies-piyush-goyal-at-brics-business-forum\/article71455149.ece\" target=\"_blank\" rel=\"noopener\">Source: TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> India has urged BRICS members and partner countries to deepen economic integration through local-currency trade, linked payment systems and easier market access ahead of the 18th BRICS Summit in New Delhi. <\/li>\n<p><\/p>\n<p><strong> About Trade in Local Currencies &#038; De-Dollarisation <\/strong><\/p>\n<li class=\"ms-5\"> Trade in local currencies means settling cross-border transactions directly in the currencies of trading countries rather than converting them into a vehicle currency such as the US dollar. <\/li>\n<li class=\"ms-5\"> De-dollarisation refers to reducing excessive dependence on the US dollar in trade invoicing, payments, reserves and international finance. <\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/12-09-2026\/brics-local-currency-trade\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-84736","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/84736","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=84736"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/84736\/revisions"}],"predecessor-version":[{"id":84738,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/84736\/revisions\/84738"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=84736"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=84736"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=84736"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}