India Ditches US Dollar, Pushes BRICS Countries To Trade Only In Rupees? Here’s What We Learnt

Is India aiming to sideline the US dollar? Well, according to several articles and social media posts going viral, India has recently issued an official circular allowing BRICS nations to settle 100% of their trade transactions in Indian Rupees (INR). This move, analysts allegedly say, could accelerate the decline of the US dollar’s supremacy in international markets as this gives BRICS an edge in trade and skirts Trump’s controversial tariffs by using the rupee and not the USD.

“The banks can now allow export and import businesses from other countries to settle trade in the rupee through the special Vostro accounts. The circular comes after Trump imposed 50% tariffs on India last week, and the Modi government wants to strengthen the rupee. The development is seen as a retaliation against the policies of the White House. Apart from BRICS, India has also sent the circular to other countries, granting them direct payments in the rupee and not the USD. Cross-border transfers will benefit India and make the USD face a deficit in the international markets…,” reads one such article, dated August 13, 2025, amid warnings from the US that Washington could increase secondary tariffs on India.

Fact Check

Newschecker noticed that the viral articles and posts stated that India has allegedly sent an official circular enabling full INR-based trade for BRICS countries — an alliance of emerging economies, which includes Brazil, Russia, India, China, and South Africa, as well as five new members.

Has India Issued A Circular?

We did not come across any official circular or news reports on the Indian government mandating or enabling BRICS countries to conduct 100% of their trade in INR.

However, a keyword search led us to this Financial Express report, dated August 11, 2025, stating that the Reserve Bank of India (RBI) has allowed banks to open Special Rupee Vostro Accounts (SRVAs) without prior approval, promoting INR-based global trade amid US tariff threats from former President Donald Trump targeting BRICS nations.

“In its circular issued on Aug 5, RBI highlights that this decision is effective immediate and is an extension to the previous order issued on July 11, 2022. Under this framework, exports and imports can now be invoiced and settled directly in Indian Rupees. The exchange rate between the trading partner countries will be determined by market forces, allowing for greater flexibility,” read the report.

Similar Economic Times and BusinessLine reports reiterated that the RBI had tweaked norms and allowed banks to open SRVAs of correspondent banks without its prior approval.  However, the central bank has reportedly emphasised that while the approval requirement has been done away with, banks must continue to adhere to all existing norms and due diligence procedures in line with the Foreign Exchange Management Act (FEMA) and KYC standards.

“…Reserve Bank of India has put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR. Under this arrangement, AD banks are permitted to open Special Rupee Vostro Accounts (SRVAs) of correspondent banks, with the prior approval of the Reserve Bank for settling cross-border trade transactions…The above change in procedure will considerably quicken the process for opening of SRVAs,” read the press release from RBI, dated August 5, 2025.

What Is SRVA?

“The Reserve Bank of India (RBI) announced a new trade mechanism to settle international trade in rupees. To settle these trade deals, authorised Indian banks need to open and maintain Special Rupee Vostro Accounts of the partner trading country’s banks. Simply put, Rupee Vostro Accounts keep the foreign entity’s holdings in the Indian bank, in Indian rupees. When an Indian importer wants to make a payment to a foreign trader in rupees, the amount will be credited to this Vostro account. Similarly, when an Indian exporter has to be paid for goods and services in rupees, this Vostro account will be deducted and the amount credited to the exporter’s regular account,” read a MoneyControl write-up on SRVAs, dated July 14, 2025.

In short, an SRVA is a designated account that enables foreign entities to settle transactions in INR with Indian banks, hence promoting INR use in international trade.

‘De-Dollarisation Not Part Of India’s Financial Agenda’

We learnt that the Ministry of External Affairs (MEA) has clearly stated, amid escalating trade friction with the US, that de-dollarisation is not part of India’s financial agenda. This has been reported by multiple major media outlets, including India Today, The Times of India and Business Standard.

“We have made our position very clear on this issue earlier as well. De-dollarisation is not part of India’s financial agenda,” MEA spokesperson Randhir Jaiswal reportedly said at a weekly media briefing on August 14, when asked about Brazilian President Lula’s statement that BRICS nations may consider an alternative currency amid tension with the United States over steep tariffs on BRICS nations.

“India hasn’t taken any steps to actively reduce its reliance on the US dollar in international trade, according to External Affairs Minister S Jaishankar. Instead, India aims to ‘derisk’ its trade by diversifying its trade partners, exploring alternative payment systems, and reducing reliance on a single currency. India has signed agreements with countries like Russia, the UAE, and the Maldives to settle trades in local currencies, reducing the need for dollar conversion and exchange rate risks. India is also opposed to having a common currency with China and other BRICS nations, citing geographical differences and a lack of economic integration,” read a Business Standard report, dated August 14, 2025.

India Has Not Ditched US Dollar

Although the RBI circular removes a bureaucratic hurdle regarding the SRVAs to ease cross-border trade transactions, the move does not make the US dollar obsolete.

The RBI continues to engage in trade in US dollars with rupee trade through SRVAs just an additional tool. However, India is exploring trade for specific partners in local currencies to reduce reliance on the US dollar , cut transaction costs and to make the INR more widely accepted in global trade.

Also Read: ‘Retiring Room Empty, Yet No Vacancies’: Is There An Online Booking Scam At Guruvayur Railway Station?

Conclusion

The viral claim that India is pushing BRICS countries to trade only in INR in an attempt to completely sideline the US dollar was found to be misleading.

Sources
Youtube video, MEAIndia, August 14, 2025
RBI press release, August 5, 2025
Financial Express report, August 11, 2025
Business Standard report, August 14, 2025