The Internationalization Of India’s Rupee Is An Emerging Financial Trend Worth Monitoring
India aims to consolidate its emerging leadership in the Global South, which explains the priority focus that’s now being given to internationalizing the rupee. Upon making significant progress on this, it’ll then be able to function as an independent pole of economic influence across Afro-Eurasia, taking full advantage of its geostrategic location to accelerate South-South integration processes.
De-dollarization is the top financial trend of this decade, but it concerns much more than just the internationalization of China’s yuan – including its speculatively forthcoming petroyuan variant – and the Alt-Media Community’s unrealistically high hopes about BRICS’ planned reserve currency. One of the emerging aspects worth monitoring is the internationalization of India’s rupee, which is proceeding apace and gradually generating more media attention.
Reuters reported in early March that “India’s oil deals with Russia dent decades-old dominance”, the grand strategic impact of which was analyzed at the time here. This followed the Reserve Bank of India’s creation of a rupee settlement system for international trade last summer, which set the basis for two major developments over the past week. India’s newly unveiled Foreign Trade Policy prioritized further internationalizing the rupee, after which Delhi offered this option to countries facing a dollar crunch.
This globally significant Great Power is already the world’s fifth-largest economy, and the British High Commissioner predicted that it’ll be “one of the three defining countries in the world” amidst the impending trifurcation of International Relations that’ll result in it informally leading the Global South. The timing therefore couldn’t be better to internationalize the rupee, especially in its trade with the Russian half of the Sino-Russo Entente and the world’s dozens of fellow developing countries.
India envisages itself playing an irreplaceable balancing role in the New Cold War between the US-led West’s Golden Billion and the aforementioned Entente over the direction of the global systemic transition. While sympathizing with the Entente’s multipolar mission, India is nevertheless committed to keeping a foot in both de facto blocs and remaining neutral in their worldwide competition, which its policymakers believe is the best approach for supercharging its continued rise across this century.
To that end, India aims to consolidate its emerging leadership, which explains the priority focus that’s now being given to internationalizing the rupee. Upon making significant progress on this, it’ll then be able to function as an independent pole of economic influence across Afro-Eurasia, taking full advantage of its geostrategic location to accelerate South-South integration processes. China is also pursuing something similar, but India’s role in this respect gives Global South states a friendly alternative.
The preceding insight isn’t to suggest a zero-sum choice between those two, but just to highlight the importance of developing countries having different options instead of feeling compelled to accept whatever China offers due to an absence of non-Western economic-financial choices. China and India are thus playing complementary roles in speeding up South-South integration processes through the internationalization of their national currencies.
Unlike China’s, which the West will surely try to stop from being used more frequently by developing countries (including through the use of Hybrid War subterfuge if they become desperate enough), no such pressure is expected to be imposed upon India’s due to its strict neutrality in the New Cold War. This suggests that the rupee has a very high chance of becoming one of the world’s major currencies by the end of the decade, hence why it’s worth monitoring this emerging financial trend.