Trump’s Tariff Threat: Where India Stands on BRICS Currency vs Dollar

Aakhir Tak – In Shorts

Donald Trump warned BRICS nations of 100% tariffs if they develop a new currency.
Trump claimed a BRICS currency threatens the US dollar’s global dominance.
India remains cautious about adopting a BRICS currency.
The US recently became India’s largest trading partner, with bilateral trade surpassing $120 billion.
S. Jaishankar emphasized the need for realistic assessments before adopting any common currency.

Aakhir Tak – In Depth

Trump’s Threat and Its Global Impact

Donald Trump issued a stark warning to BRICS nations, including India, about imposing 100% tariffs if they develop a common currency to replace the US dollar. He asserted that any country challenging the dollar’s dominance would lose access to the American market.

India’s Cautious Approach

India has adopted a measured stance on the proposed BRICS currency. External Affairs Minister S. Jaishankar highlighted the challenges of currency alignment, pointing out the need for economic, monetary, and political consistency among member nations. He emphasized the practicality of continuing trade in local currencies rather than introducing a new intermediary currency.

Significance of India-US Trade Relations

The US has recently overtaken other countries to become India’s largest trading partner, with bilateral trade exceeding $120 billion. This strong economic relationship makes India wary of any policy shifts that could destabilize this partnership. Key Indian exports, including IT services, pharmaceuticals, and textiles, could face higher costs and reduced competitiveness under Trump’s proposed tariffs.

Strategic Concerns and Challenges

India also remains cautious about China’s growing influence within BRICS. Aligning with a BRICS currency could risk India’s economic stability and strategic ties with Western powers. By maintaining a balanced foreign policy, India aims to avoid jeopardizing its long-term interests while navigating global economic shifts.