Razorpay Payment Gateway: BRICS de-dollarisation meets ″insider ghosts″? To kick China out of the BRICS payment system?

India is up to its old tricks again! The BRICS summit in Kazan, Russia, in October this year, is a major step towards "de-dollarisation" as the BRICS countries prepare to set up a new payment mechanism to bypass the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

However, at this critical juncture, India has made it clear that it will vote against the proposal if its two conditions are not met.

Why is India leading the opposition to the BRICS' first challenge to the hegemony of the dollar? What exactly are they opposing?

The reason is very simple: this settlement system is not dominated by India and is not settled in rupees - simple as that!

India has always been full of blind confidence, boasting of being the heir to the British Empire. In the past, it did not set up its own settlement system for fear of retaliation by the United States. Now, because someone else has set up a system that the United States cannot destroy, it is obstructing it at every turn. It is like someone overthrowing the emperor and India is uncomfortable because it did not do it. When it was time to charge, India backed down and now it is demanding benefits. Who pays any attention to them?

The Modi government has made two demands!

First, the draft resolution must be non-binding, allowing India the freedom to choose the member countries for currency settlements.

Second, India reserves the right to "exclude China" from local currency settlements with other BRICS countries.

Isn't India trying to take advantage, trying to maximise benefits at minimum cost?

Since 2008, China has been advocating the use of local currencies for settlement. 16 years on, China has signed currency swap agreements with 36 countries and regions.

The proposed new settlement system was advocated by Russia, with local currency settlement, and other countries echoed and participated. This proposal is naturally favourable to India and therefore India is not opposed to it. It only opposes the use of RMB for business transactions with China as it is not conducive to the internationalisation of the rupee. Do you know the status of the rupee? Do you want it to circulate globally? And how should that be achieved?

According to statistics, India's total exports and imports will reach $1.1 trillion in 2023, with a deficit of $240 billion, consisting mainly of refined oils, precious metals and their processing industries, agricultural commodities, bulk pharmaceuticals and intermediates, accounting for about 2.31 TP3T of total global trade. in comparison, China accounts for one-fourth of global trade. Where does India get the confidence to compete with us?

On closer inspection, we can see that India does not have many export industries and relies heavily on agricultural exports for foreign exchange.

India's main source of foreign exchange is remittances from overseas Indians, most of whom are from Commonwealth countries. There are not many Indians in BRICS countries like China and Russia. Therefore, it is difficult for India to get enough foreign exchange in the BRICS payment system and currency, which inevitably leads to a very low exchange rate for the rupee in the BRICS system.

Indians who make money in Commonwealth countries convert pounds and dollars into rupees, which is needed for India to buy large quantities of Chinese goods and Middle Eastern or Russian energy, all through foreign exchange reserves in pounds and dollars. This is India's economic cycle.

In this light, it seems somewhat understandable that India holds such an attitude!

But is India's position valid?

Can you remember the Regional Comprehensive Economic Partnership Agreement (RCEP)? The agreement included a variety of countries, from US allies such as Japan, South Korea and Australia to India, China and ASEAN countries. What happened in the end? All the countries in the "Western camp", including Japan, South Korea and Australia, agreed to it, except for India, which stubbornly opposed it. In the end, everyone decided to sign the RCEP without India, leaving India on the sidelines!

Frankly, India is not important; its only role is to cause trouble. It can make problems drag on for a year or two and cause delays. So when countries consider trade agreements, their first reaction is often, "Don't involve India to avoid more trouble." What does India have to gain by this kind of behaviour, other than offending people? It is short-sighted, focusing on immediate gains and ignoring long-term interests. No wonder it can never become a first-class country.

Let us talk about the BRICS settlement. China's economy alone is larger than that of all the other BRICS countries combined. Excluding China from the settlement mechanism would make it meaningless. It would be as absurd as a neighbour with a 20-square-metre flat trying to evict a neighbour with a 400-square-metre flat.

Who needs this settlement mechanism the most? Certainly countries that have become almost economic orphans, such as Russia. It would also be useful for countries with unstable currencies or at risk of US sanctions, such as Turkey, South Africa, Brazil, India and Iran. China, on the other hand, is in no hurry to do so.

At the heart of a settlement mechanism is demand. Just as Russia needs the renminbi at the moment, it is naturally positive about this settlement, and China is happy to see this. The strong demand for the RMB in the BRICS countries makes it the natural choice to play a leading role in BRICS settlements.

Of course, India wants all BRICS countries to use the rupee. But that does not depend on their own wishes alone. Who else would want to hold large amounts of rupees? Not to mention your country's credibility issues, what can other countries buy from India? Spices? Or Indian style cow dung? These seem to be the favourites of only you Indians yourselves and other countries are not interested!

I predict that just like RCEP, all BRICS countries will sign a settlement agreement with China and leave India out to dry. If India doesn't want to participate, then it can stay out. India can promote rupee settlement on its own, but the question is, who will sign up for it? No one is stupid, they know India wants to print money and get goods from other countries for free.

Currently, only the UAE partially accepts the Indian rupee as a settlement currency. Why? It's not because they can buy things in India in rupees, but because they have a large number of Indian workers and can pay them in rupees. It's like running an Indian restaurant and receiving rupees that can be used to pay Indian chefs. But not all countries run Indian restaurants, so what else can they do with rupees?

In essence, India is assuming that its needs are the needs of the world. It wants other countries to use the rupee, but other countries do not need it. This is a completely different situation from that of China, where other countries really need the yuan and China is willing to promote it. It is a win-win situation.

In short, India's tactics only make them look irrational without achieving any real results. They would be better off focusing on developing their economy and increasing their international influence. Unfortunately, they seem to prefer these "clever" manoeuvres, which only create more problems. Aren't they digging their own graves?

Maybe we should just leave? Create an independent payment and trade system, separate from the BRICS system. It doesn't need to be big; fewer people, less chaos, a semi-independent trade system with a higher threshold, more co-operation and less confrontation would reduce unnecessary friction and ensure the smooth running of the payment system. Creating so much conflict here is clearly deliberate!

In the past, India was ignored because it was far away and in the future it will be ignored because of the language barrier. It is remarkable that India has fluctuated for thousands of years and has always been neglected. It seems to want to continue to be ignored in the future.