As India prepares to host a pivotal foreign ministers’ summit, the bloc races to launch a CBDC‑driven payments system designed to blunt Western sanctions and dollar shocks — even as New Delhi delicately balances trade talks with Washington
Kehinde Adegoke | SCMP
BRICS nations are actively exploring a decentralised cross-border payments system that would allow member countries to settle trade in their local currencies, significantly reducing reliance on the US dollar and Western-controlled financial channels such as SWIFT.
The proposal, driven by India’s central bank, aims to create a more resilient infrastructure for intra-BRICS transactions. It is expected to feature prominently when BRICS foreign ministers convene in New Delhi on May 14-15, 2026, ahead of the bloc’s annual summit scheduled for September 10-11.
Experts describe the initiative as a strategic “immunity shield” against external economic pressures, including sanctions, tariffs, and fluctuations in the US dollar.
Geeta Kochhar, senior assistant professor at Jawaharlal Nehru University’s Centre for Chinese Studies, said the system would act as a buffer: “It is like a strategic tool to provide immunity against Western economic leverage. Even if there is dollar volatility, it will not impact payments as it will be near real-time payments.”
Such a framework could enable direct transactions in currencies such as the Indian rupee, Chinese yuan, and Russian ruble, bypassing intermediary Western banks and reducing conversion costs. It builds on earlier BRICS commitments to enhance payment interoperability and draws from India’s successful domestic digital payment systems.
Russia and Iran, long subject to Western sanctions, have already shifted large parts of their energy trade with China and India away from the dollar. A formal BRICS payments mechanism would serve as an “insurance policy,” ensuring continued access to critical commodities even under heightened geopolitical tensions.
With BRICS members collectively accounting for roughly 42% of global oil and 40% of grain production, the bloc believes it possesses sufficient economic heft to manage intra-group currency settlements effectively.
India’s Tightrope Walk
However, the push comes at a sensitive time for India. While championing greater financial autonomy within BRICS, New Delhi is simultaneously pursuing an interim trade deal with the United States under President Donald Trump.
In February 2026, Trump reduced US tariffs on Indian imports from 25% to 18%. Analysts warn that any perception in Washington that the BRICS is actively working to undermine the dollar’s dominance could complicate ongoing negotiations.
Biswajit Dhar, economics professor at the Council for Social Development, cautioned that Indian negotiators must proceed carefully: “Delhi should be wary of upsetting US President Donald Trump… Trump was concerned about any move that could challenge the dominance of the US dollar.”
Vivek Mishra of the Observer Research Foundation offered a more reassuring interpretation, arguing the system is not intended as a direct rival to the dollar. “This arrangement is not an alternative to the dollar,” he said. “It is more about control of central banks from BRICS and their ability to talk to each other” — for instance, facilitating rupee-ruble settlements for Indian purchases of Russian oil.
As BRICS foreign ministers prepare to meet in New Delhi, the discussions will test how far the expanded bloc (now including Egypt, Ethiopia, Indonesia, Iran, and the UAE) is willing to go in building a parallel financial architecture without provoking a strong backlash from the West.
For India, the challenge lies in balancing its strategic autonomy goals with the need to maintain a stable and productive relationship with the United States.
PIX CAPTION: Indian currency notes at a roadside currency exchange stall in Delhi. Brics has proposed linking the currencies of member states, such as the Indian rupee, to settle transactions within the bloc. Photo: Reuters