Brics Leaders Stress Need for Trade Settlement in Local Currencies

As the 18th BRICS Summit in New Delhi concluded, significant clarification was provided regarding the bloc’s financial trajectory. Sudhakar Dalela, secretary of economic relations in India’s Ministry of External Affairs, addressed the media to put to rest speculation surrounding the creation of a singular, unified BRICS currency.

“There is no proposal in the BRICS for a BRICS currency, as of now,” Dalela stated emphatically. Instead, the group’s focus remains anchored on the pragmatic refinement of existing trade frameworks.

Dalela highlighted that discussions concerning the settlement of bilateral trade using local currencies have been ongoing within the organization for a considerable period and do not constitute a new initiative. He framed the utilization of national currencies not as a disruptive tool to dismantle the existing global payment and settlement architecture, but rather as a practical mechanism to mitigate transaction costs.

“We believe local currency settlement is a practical mechanism to reduce transaction cost in bilateral trade. This has been encouraged as complementary to global payment and settlement system, improving overall global trade across nations,” he explained.

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This measured approach seeks to bolster economic resilience without aiming to supplant the established international financial order, even as the grouping addressing the challenges of cross-border financial interoperability.

Movement Toward Local Currency Settlements

The movement toward local currency settlements has emerged amidst a backdrop of intense international scrutiny. US President Donald Trump has been an outspoken critic of these efforts, warning last year that nations actively seeking to diminish their reliance on the US dollar could be subject to punitive tariffs.

Trump’s characterization of BRICS as a collective effort to challenge the hegemony of the American currency underscores the geopolitical sensitivities inherent in these financial shifts. Despite such external pressures, the New Delhi Declaration reflects a cohesive internal consensus, acknowledging the necessity of promoting trade settlements and investments in local currencies while recognizing that there is no “one-size-fits-all” approach to implementation.

Central to these efforts is the BRICS Payment Task Force (BPTF), which is currently tasked with evaluating the cross-border interoperability of various payment and messaging channels. The declaration formally mandates that the BPTF continue its work toward developing practical payment solutions that are characterized as “fast, low-cost, more accessible, efficient, transparent, and safe.” During the BRICS Business Forum, high-level leaders-including Prime Minister Narendra Modi, Russian President Vladimir Putin, and Iranian President Masoud Pezeshkian-collectively championed this deeper economic integration.

President Pezeshkian specifically emphasized the vulnerability of current financial systems to political shocks, arguing that the New Development Bank should evolve into a primary source of financing for critical infrastructure and energy projects, utilizing local-currency lending to insulate members from external market volatility and attract private capital.

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Beyond the nuances of payment systems, the New Delhi Declaration articulated a firm stance on the integrity of global trade. The leaders underscored that the multilateral trading system has “long been at a crossroads,” expressing grave concerns over the proliferation of unilateral tariff and non-tariff measures that threaten to sever global supply chains and induce economic uncertainty.

The bloc specifically denounced measures such as carbon border adjustment mechanisms, which they argue are punitive, discriminatory, and disproportionately harmful to developing economies. The declaration explicitly stated: “We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules.” Reaffirming their commitment to the World Trade Organization, the member nations called for a return to a rules-based system that is equitable, transparent, and inclusive, stressing the urgent need for a fully functional, two-tier binding dispute settlement mechanism.

This summit serves as the capstone for eight months of intensive diplomacy under India’s chairship, which facilitated over 350 meetings across diverse ministerial groups and thematic clusters. As India hosts the 18th Summit, the discussions have also reflected on the broader global landscape, with leaders acknowledging the profound impact of ongoing conflicts and economic instabilities.

In response, they have consistently underscored the importance of dialogue, diplomacy, and the peaceful resolution of differences to maintain stability. Guided