Recently there was an important news from the International Energy Market. According to the report, after purchasing crude oil from Russia, India has started paying in Chinese currency Yuan. That means India is buying crude oil from Russia but is making payment to Russia in Chinese currency Yuan. This is a big effort to end the dominance of the dollar.
Although the payments in Chinese currency are less in comparison to India’s total deal, it reflects the shift in the payment system from India’s side and also makes it clear that India-China and Russia Without even creating a BRICS currency, it has started shoring up Trump’s dollar pride.
Let us tell you that currently the price of one yuan in the international currency market is 12.34 Indian rupees. This step of India may be small but its geopolitical implications are strong and give a message. Russian Deputy Prime Minister Alexander Novak has confirmed that India is still paying mainly in rubles, the Russian currency, but the use of yuan is also increasing. This step will be taken by India without any BRICS currency. China And Russia is strengthening the triangular alliance, which is dealing a blow to President Donald Trump’s ‘Dollar Diplomacy’.
A website named Investing live has said in its report that recently Indian government company Indian Oil Corporation has recently bought two to three Russian… Oil The cargo is paid for in yuan.
The move marks a change from 2023, when state refiners stopped taking payments in yuan amid government discomfort amid strained relations with China, while private refiners continued to use the currency.
India’s resumption of payments in Chinese currency also indicates that the signals between the two countries (India-China) have become cordial.
Remember Trump’s threat
The change in crude oil payment system by India is linked to a statement by President Trump. US President-elect Donald Trump had given a stern warning to the BRICS (Brazil, Russia, India, China, South Africa) countries against creating a new currency or supporting an alternative to the dollar. Trump had said in a post on Truth Social on November 30, 2024, “BRICS countries should not create a new currency, otherwise 100% tariffs will be imposed and these countries will withdraw from the US market.”
This statement of Trump is part of his ‘America First’ policy, where Trump wants to preserve the global dominance of the dollar at all costs. Trump argues that the dollar accounts for 58% of global trade, and BRICS efforts will weaken it.
Why do BRICS countries want de-dollarization?
De-dollarization is the process of reducing the dominance of the US dollar over the global financial system. This is being driven mainly by the BRICS countries, which represent about 40% of global GDP and 45% of the population. By 2025, the global share of the dollar in international trade is expected to decline from 73% to 54%.
The BRICS countries want de-dollarization to reduce the global dominance of the US dollar, and to increase the economic and geopolitical autonomy of these countries. After the Ukraine war, America imposed sanctions on Russia and barred Russia from the Swift payment system. This made the BRICS countries realize that America can use the dollar as a ‘weapon’.
India-China-Russia found a middle path
BRICS countries are moving towards de-dollarization but this pace is slow. After Trump’s threat, BRICS countries have slowed down the proposal of new BRICS currency. South Africa has said that there are no plans for a new currency.
BRICS postponed plans for a joint currency at the 2025 Rio summit. Instead, emphasis was placed on trading in local currencies. Now BRICS Pay is developing as a decentralized payment platform. Which will become an alternative to Swift. In 2025, 90% of BRICS trade is happening in local currencies. The yuan accounts for 44% of Russia-China trade.
Now paying in Chinese currency when India buys crude oil from Russia is a middle path other than BRICS currency. Due to which India’s work will also be done and the dominance of dollar will also be challenged. Therefore, this yuan-based trade between India, China and Russia is the real form of that ‘first phase’.
India, the world’s third largest oil consumer, spent 2.5 billion euros on buying crude oil from Russia in September. This is 14 percent less than last month.
India’s Yuan experiment is currently more of a practical mechanism than a geopolitical move. So that Russian oil can be available cheaply and western sanctions can be dealt with. Its strategic implications are deep.
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