BRICS settlement system opening soon, why India strongly opposes: India's native payment channel

One of the key issues at the lively BRICS summit in Kazan, Russia, was the introduction of a new settlement system within the BRICS framework to replace the existing US dollar-based SWIFT system.

This is a significant and positive development for emerging countries, as it allows them to avoid overdependence on the dollar and the potential sanctions and exploitation that come with it. Russia, as a member of BRICS, knows this first hand and has made this proposal. However, not all BRICS countries are in agreement on this. India, in particular, is strongly opposed to this initiative.

They offered two options: either continue to support dollar settlement or replace the dollar with the Indian rupee as the settlement currency.

Why does India oppose it? Firstly, India is undoubtedly defending its own interests. They want to use the rupee for settlements, but India does not have enough influence to support its currency. In addition, India is known for its extreme measures for its own interests, such as frequent devaluation of the rupee. With such a fragile national credibility, who would trust them?

Secondly, India's national character also plays a role. India has often behaved like a rebellious adolescent, opposing for the sake of opposition. Third, the move was made to please the United States in the hope of gaining its favour. Fourth, India used it to increase its leverage in negotiations with Russia. Fifth, India is jealous of the rise of the Eastern powers. Once the settlement system is in place, the renminbi is likely to dominate, given its stability and the wealth of products offered by China.

Despite India's objections, the voting mechanism on this issue is not based on the right of veto, so India's objections are invalid. The new BRICS settlement system could be voluntary, with countries opting in or out as they wished. If India does not agree, it could well be excluded from the system. Or, even if a unanimous decision is required, countries interested in the new system can organise themselves separately to exclude India. In fact, it might be more beneficial to exclude such "rebellious youth".

Frankly, the BRICS countries have long suffered from dollar dominance and aspire to de-dollarisation. This new settlement system offers a way to bypass the dollar and avoid potential U.S. sanctions. In addition, it reduces the need to pay dollar mint taxes, a win-win situation for all countries.