A Changing World Order
India, Russia, US And The Challenge To Dollar Dominance
Poonam Sharma
The world of economics is in for a seismic shift as countries like India contend with the US sanctions on Russia, the might of the US dollar and the changes underway within the BRICS bloc. The central question of this transformation is: Is the world ready to move beyond the dollar and what is India’s place in the new order?
The India-Russia Oil Trade and the American Dilemma.
Following the Russia-Ukraine conflict, the US and its Western allies imposed extensive sanctions on Russian energy exports, aiming to cut off Russia’s economic lifeline. But India, prioritizing its energy security and national interest, continued to import discounted Russian crude oil at an unprecedented level. The US objected to this practical approach, calling it “double standards” on India’s part. But this was not the case for Western countries, which often made exceptions for themselves, highlighting the inherent hypocrisy in global energy politics.
BRICS and the Local Currency Trade Push
The BRICS countries (Brazil, Russia, India, China, and South Africa) are actively seeking to reduce their dependence on the US dollar in international trade. India has officially announced that it will purchase oil from Russia using local currencies such as the rupee or the ruble . It is a brave step toward de-dollarisation . The launch of systems like UPI for cross-border settlements indicates the technological readiness of India to bypass the existing Western financial infrastructure.
The US response and the new economic cold war
The US has threatened 100% tariffs and secondary sanctions against any country buying Russian oil outside the dollar system. But inflexibly, India is asserting its right to trade in the currency that suits it best. The US’s approach shows a glaring double standard – giving the European allies a pass on the rule and pressuring countries like India. This points to the widening gap in the global economic governance.
Real Threats to Dollar Dominance
The dominance of the dollar in the oil trade has for decades underpinned US economic and political power. But the dollar’s dominance is increasingly under threat as BRICS members step up efforts to use their own currencies. If India, Russia and China can carry out the bulk of their trade in non-dollar currencies, it could have a revolutionary effect on global finance.
Strategic Autonomy
India’s Deliberate Course Strategic autonomy has been the core principle of India’s foreign policy. The continued purchase of Russian oil under Western duress suggests an economic “realpolitik” is at play over ideological solidarity. India understands that affordable energy is the key to sustaining its growth and ambitions. At the same time, India’s push for local currency trade in BRICS is helping to chart a course to a more multipolar world.
The emergence of a new economic reality – India’s firm stance in the US-Russia standoff signals a new phase in global economics. The coordinated challenge from the BRICS to dollar supremacy, and India’s refusal to bow to pressure, signals a possible re-distribution of economic power. If BRICS can create parallel monetary systems, the global order could be more balanced and fair. India is not just a beneficiary in this unfolding drama, but a leader, showing the way to other developing countries on how to protect national interests in a fast changing world.
