By BarathVector Editorial — 2026-09-14

Paragraph 90 of the New Delhi Declaration, adopted on Saturday by eleven governments that between them hold nearly half the world's people and a good part of its oil, is the whole of what BRICS agreed about money. It acknowledges a task force. It acknowledges "the work done to study the cross-border interoperability of payment and messaging channels". It acknowledges "the discussions on promoting trade settlements and investments using BRICS local currencies, while respecting national priorities and acknowledging that there is no one-size-fits-all approach". Then it encourages the task force to keep talking.

Read the 140 paragraphs for what is not there and the document becomes legible. The words "common currency" do not appear. "BRICS Pay", the settlement rail the BRICS Business Council launched in 2018 and Moscow has pushed hardest since, is not named. "Dollar" does not appear. Neither does "CBDC", nor "SWIFT", nor "Hormuz", though the strait through which 45 per cent of India's crude once came has been closed since March. The one phrase from this whole argument that survives into the text is "local currencies", and it survives twice: once in paragraph 90, and once at paragraph 115, where the New Development Bank is encouraged to "expand local currency financing".

That is not an accident of drafting. That is the draft. India held the chair and the pen, and the pen produced a declaration in which the bloc's most watched ambition is reduced to a study group with good manners. The Ministry of External Affairs' Secretary (Economic Relations) and India's BRICS sherpa, Sudhakar Dalela, said afterwards that there was no proposal for a common BRICS currency "as of now", and that local-currency settlement was, in his framing, a practical mechanism to reduce transaction costs in bilateral trade. The Reserve Bank's governor, Sanjay Malhotra, had put it the same way in Mumbai a month before the summit: "there is a lot of scope for reducing cost." Nobody in Delhi used the word the rest of the bloc came to hear.

The question this newspaper has been asked, more than once since January, is whether India can keep sitting on the fence between the dollar and whatever BRICS is building, and if it can, what it should do so that Beijing does not end up where Washington sits now. The answer, on the record of this week, is that the fence is the policy. It was drawn to the inch on Saturday. What follows is why it holds, what it stands on, and what it costs.

A correction, first

In January this desk called BRICS India's insurance: the policy Delhi would cash if Washington pushed too far. Washington pushed. It put fifty per cent on Indian goods in August 2025 for the crime of buying Russian oil that Washington itself was, by March, waiving India to buy. The rate came down to eighteen in the February framework, and the interim agreement that was to be signed by mid-March is still unsigned; the commerce minister said on 3 September that India would sign when the rate gave its exporters an edge over competitors. And Delhi did not cash the policy. It did something the insurance metaphor could not describe. It built a second set of pipes and started using them every day, without ever saying so.

The metaphor was wrong because insurance is a thing you claim once. Plumbing is a thing you use. The Bridge Builder piece of the same month had the better instinct, that India wanted BRICS useful without making it threatening, but it read that as a diplomatic posture. It is a financial one, and the deeds are dated.

Deeds, not words

Set the official line aside for a moment, because it has not moved since Jaishankar said in March 2025 that India had no policy to replace the dollar, and look at what the state has done with its money since.

In October 2025 Indian Oil, a state refiner, paid in yuan for two or three cargoes of Russian crude. State refiners had stopped doing that in 2023, during a cold spell with Beijing; private refiners never stopped. By March this year, with Hormuz shut and Brent above a hundred, refiners had bought about thirty million barrels of Russian oil in the first days of the American waiver and were settling it, by Bloomberg's account, by depositing rupees in Russian sellers' offshore accounts for conversion to dirhams or yuan, with Singapore and Hong Kong dollars under consideration.

In August 2025 the Reserve Bank allowed foreign holders of special rupee vostro accounts to put their surplus rupees into central government securities and treasury bills. In July this year it consolidated five circulars on those accounts into one, restating that banks need no prior approval to open them. In January it proposed that BRICS members link their central bank digital currencies for trade and tourism payments, and put the proposal on its own summit's agenda. And between September and March it brought its gold home: by end-March the Reserve Bank held 880 tonnes, 77 per cent of it in India against about 58 per cent a year earlier, and gold had risen to 16.7 per cent of the reserves, nearly three times its share five years ago.

None of this is de-dollarisation and the Reserve Bank is right to refuse the word. All of it is a state making sure it can pay for what it needs if the dollar is ever withheld from it, which is a different thing, and which India was not doing three years ago. The cause is not mysterious. A country that watched the word "ally" buy it a fifty per cent tariff, while Moscow got a summit in Alaska and Beijing gets a state visit, has learnt what the label is worth in this Washington, and has stopped paying for it. It has kept the words, because the words are free, and changed the deeds, because the deeds are what a crisis tests.

The one currency anyone can spend

Here the argument turns, because the fence India has drawn does not protect it from the thing it should fear.

The thing it should fear is not a BRICS currency. Nobody is building one; Moscow said in February that it was not pursuing one, and the gold-backed "Unit" that circulates in the trade press is a research institute's proposal that no central bank has adopted. Nor is it the yuan as a reserve currency. At the end of March the renminbi was 1.99 per cent of the world's allocated reserves, against 57.13 for the dollar and 20.03 for the euro. In June it carried 2.18 per cent of payments over SWIFT, sixth in the table, and the dollar carried 82.5 per cent of trade finance. Three quarters of renminbi payment traffic ran through Hong Kong in May. A currency under capital controls does not become the world's savings, and Beijing knows it.

What Beijing can become is the operator of the pipes for the awkward trade, the settlement tier that runs where sanctions reach. And that tier has one property that the phrase "local currencies" is designed to hide: of all the BRICS currencies, only one can be spent by a surplus partner anywhere it likes. Ninety-nine per cent of Russia's trade with China settled, as of last November, in rouble and yuan. On mBridge, the central-bank digital-currency platform that China, Hong Kong, Thailand, the UAE and Saudi Arabia run since the Bank for International Settlements walked away from it in October 2024, 95 per cent of the fifty-five billion dollars settled up to last November was digital yuan. And when Russian traders asked Indian refiners for yuan last October, they asked for the reason Russia's deputy prime minister gave in 2023: "because of a lack of imports from India, it's not enough to use the rupee." Russia can spend yuan because China sells Russia things. It could not spend rupees because India did not.

So "trade settlements using BRICS local currencies", the phrase India's own pen put in paragraph 90, resolves in practice into settlement in the one local currency that works, and that currency is Beijing's. De-dollarisation inside BRICS is yuan-isation by default. China needs no common currency and asked for none in Delhi; the readout of Xi's meeting with Modi on Saturday is about the boundary and the trade imbalance and says nothing about payments at all. It does not have to. It needs everyone else's bilateral settlement to route, by the path of least resistance, through rails it runs. The Kremlin's spokesman said before the summit that Russia "does not seek de-dollarisation" and is open to any acceptable payment method, and the chairman of the body promoting BRICS Pay said, in remarks published on Friday, that "we are not claiming to replace anything." Both are true and neither is reassuring. Nobody needs to replace the dollar for the yuan to become the currency in which India pays for Russian oil.

Russia says the rupee works now

The one piece of good news this week came from an unexpected direction. Sberbank's chief executive, Herman Gref, told reporters in Delhi on Friday that the mountain of rupees Russia accumulated in Indian vostro accounts in 2023 was no longer the problem in the trade, and that the two central banks were working directly on settling trade in digital currencies. "Now it's only beginning," he said, "but we see huge opportunity for digital currency for all settlements between the countries."

If that holds, the Manturov objection is dead, and the rupee, not the dirham or the yuan, is the working answer to how India pays Russia. It is worth asking how it died, because rupees become spendable in only three ways, and each has a price.

The first is that Russia buys more from India. Trade was nearly sixty billion dollars in the fiscal year to March and the two governments restated a target of a hundred billion by 2030 on Friday, but more than fifty billion of that is India's deficit, most of it crude. This route is the clean one, and it is the one Delhi would like printed. It is also the smallest.

The second is that Russia invests the rupees in Indian assets, which is what the August 2025 rule allowed: government securities and treasury bills. Some of the surplus has gone there. This is the route that actually moved the balance, and it means Russian capital inside Indian sovereign debt and Indian banks holding the accounts that the next round of secondary sanctions will be written against. Delhi has decided it can carry that. It should say so.

The third is that the rupees are converted, in Dubai or Hong Kong, into something else. This is what Bloomberg described in March, and it solves nothing. It moves the toll one step away from the refinery gate. When a rupee deposit becomes a yuan payment in an offshore account, India has settled in yuan with an extra step, and the extra step costs money.

The honest answer, and it is this newspaper's reading rather than anyone's admission, is that all three are running at once, and the mix is the measure of whether the fence works. The number to watch is not in any declaration. It is the yuan line on the refiners' books.

The floor under the fence

There is a fourth currency in this story, and it is the one that should keep Delhi awake, because it is the one Delhi leans on.

India's neutral money for the awkward trade is the dirham. It is pegged to the dollar, so it carries no exchange risk that the dollar does not; it belongs to a BRICS member, so it passes as local; and it sits outside the sanctions perimeter, so Russian sellers take it. Indian refiners have paid for Russian crude in dirhams before, India and the UAE settle bilateral trade in rupees and dirhams, and Indian Oil has paid Adnoc in rupees for Emirati crude. When India converts a rupee deposit into a third currency, more often than not that currency is Abu Dhabi's.

Now look at what Abu Dhabi did between April and May. On 28 April it announced its exit from OPEC after fifty-nine years, days after the American Treasury secretary had gone before the Senate to back the dollar swap lines Gulf allies had asked for, and in the same fortnight it floated pricing some of its crude in yuan if the war kept tightening dollar liquidity. Its central bank is a founding member of mBridge, the platform on which 95 per cent of settlement, to last November, was digital yuan. And at this summit, its crown prince held the highest-level meeting with Iran's president since the war began, weeks after suspending all trade with Tehran, while its diplomatic adviser said that its energy exports "will not be held hostage, nor will our trade and economic activity".

The Emirates, in other words, is doing with its money exactly what India is doing with its own: keeping the dollar, asking Washington to backstop it, and building the alternative rail at the same time, except that the rail it is building on is Beijing's. India's neutral currency is issued by a state that already sits on China's platform and has already said, out loud, the sentence about yuan pricing that India will never say. The fence India drew in Delhi stands on a floor that Abu Dhabi owns and Beijing wires.

That is the channel. Not China's own trade with India, where the deficit reached a record 112 billion dollars last year and where India pays in dollars because India chooses to. Not Russia's habits, which the rupee fix now bounds. The Gulf, where India's hedge and China's rail are the same institution.

What the fence costs, and what to do

A fence is affordable when you can say what it costs. India's can be stated in a paragraph, and the summit would have been a better one had anybody stated it.

After four years of effort, 3.27 lakh crore rupees of India's exports were invoiced in rupees in 2025-26, under a tenth of merchandise exports. Every deficit trade India settles "in local currency" with a partner who cannot spend rupees is settled, in the end, in a currency somebody else issues, and the price of that is paid by the refiner, in spread, and by the state, in the sanctions exposure of the banks that hold the accounts. That toll goes to whichever rail the third currency runs on, and today that rail runs, more and more, through Beijing.

So the approach is not a choice between the dollar and BRICS. It is five things India is already doing and should now do on purpose, and one thing it should refuse.

Make the rupee spendable, which means rupee assets for surplus partners, and not only government paper: rupee lending by the New Development Bank, which paragraph 115 asks to "expand local currency financing" and whose president raised its local-currency target in August to 40 to 50 per cent for the next strategy cycle, and rupee bonds that a Russian or an Emirati holder would actually want. The bilateral CBDC link that Gref described is the modern form of this, and it is India's design, not anybody's platform.

Be a hub, not a spoke. UPI is live in eleven countries, merchant acceptance in nine of them and two true system-to-system links, Singapore's PayNow and, since June, Nepal's National Payments Interface, and every one of them is a bilateral arrangement with India at the centre. India's own instinct is not always this clean: the Reserve Bank's January proposal was for a CBDC bridge among BRICS central banks, a platform, and the declaration did not carry it. The link that did move this week is the bilateral one Gref described, between two central banks. That is the right shape: India owns every link it signs, and no member owns the switch.

Name the dirham for what it is, a rented neutrality, and rent it with open eyes. It remains the best third currency available, and the dollar swap line Abu Dhabi was seeking from Washington in April is the measure of how much it still needs the dollar to keep it so. Use it, and know whose floor it stands on.

Keep buying gold and keep it at home. Sixteen point seven per cent of reserves is the quiet policy already in force, and it is the only reserve asset that is neither Washington's to freeze nor Beijing's to route.

Keep the dollar for what it alone does. Eighty-two per cent of trade finance is dollars, India's software exports, remittances and capital inflows arrive in dollars, and nothing in this piece argues for leaving that. The aim is to be un-blackmailable on the slice of India's trade that runs through partners the dollar system will not serve, not to leave the system that carries the rest.

And refuse, in law and not only in speeches, membership of any settlement rail whose technical core one member runs. That means no mBridge, where the core is Beijing's. It also means BRICS Pay, and here the summit produced a fact the declaration hid. On Friday, the day before the leaders met, Russia's sovereign wealth fund signed with BRICS Pay JSC and a company called BRICS Pay India to explore integrating BRICS Pay with India's payment infrastructure and to prepare pilots. No ministry, no Indian bank and no Reserve Bank is a party to it, and no public filing or report this newspaper could find identifies the Indian company's owners. India kept BRICS Pay out of the text and let it in through a private door on the eve of it. A fence with a gate in it is a decision that somebody else will make.

What would prove this wrong

This piece forecasts that the fence holds and that Delhi means it. By 31 March 2027 the Reserve Bank will not have joined mBridge, will not have authorised BRICS Pay as a payment system under the Payment and Settlement Systems Act, and the rupee's share of India's settlement with Russia will have risen rather than the yuan's. Any of four events would falsify it: the Reserve Bank or a public-sector bank joining mBridge; a BRICS Pay authorisation; a state refiner reporting that most of its Russian oil payments are in yuan; or Adnoc pricing a cargo for India in yuan. The first two would mean the fence was a speech. The last two would mean the floor gave way.

Until then, the reading is this. India did not sit on a fence in Delhi. It built one, wrote it into a declaration nobody objected to, and left the meter running on the other side. The question for the next six months is not whether Delhi joins anybody's monetary system. It is whether it notices, in time, whose plumbing its own fence is standing on.

BarathVector | Geopolitics | 14 September 2026