India has decided to go against its BRICS allies by refusing to follow the de-dollarisation agenda. External Affairs Minister S. Jaishankar said India would not target the US dollar and would use local currencies only where it made sense.
The move puts him at odds with China and Russia, which are leading the campaign to move away from the dollar.
Inside sources in India say the country is concerned about China’s growing control over the group. You see, the former thinks the latter is using the bloc to expand its global power and is not about to support that.
India opposes de-dollarization, Pakistan’s entry
In an official statement, Jaishankar explained India’s position:
“We have never actively targeted the US dollar.”
At the same time, Pakistan is trying to join BRICS, adding further pressure to the situation. The country first applied for membership in late 2023, hoping to gain support from members.
Russia, which has close relations with Pakistan, has already given its support to the bid. The BRICS summit, scheduled for October 22-24 in Kazan, Russia, will discuss potential membership.
Pakistan sees joining the alternative group of nations as a way to stabilize its ailing economy. The country’s GDP growth has fallen from 5% in 2022 to just over 2% in 2023-24, and its debt-to-GDP ratio is approaching 75%.
India and Pakistan have a long history of tensions, and many analysts believe India will block Pakistan’s entry into BRICS.
India could see the move as another way for China to increase its influence within the group, especially given China’s close ties with Pakistan.
New Delhi views both countries as strategic threats and would prefer to limit their role within BRICS.
Economic Challenges for Pakistan in BRICS
Pakistan hopes that BRICS membership will open the door to new markets and financial resources, including through the New Development Bank (NDB).
Unlike the International Monetary Fund (IMF), the NDB offers loans with fewer conditions, which would be a relief for Pakistan.
Russian Deputy Prime Minister Alexei Overchuk recently visited Islamabad and confirmed that Moscow supports Pakistan’s accession.
If Pakistan accedes, it could benefit from stronger trade ties with the BRICS countries, which produce 40% of the world’s oil and 42% of its grain. This would help Pakistan diversify its trade and improve its food security.
However, the group operates on a consensus basis, meaning all existing members must agree to admit new ones. That gives India the power to block Pakistan’s bid.
