De-Dollarization: Russia & India Move Toward National Currencies in Trade. The global economic landscape is witnessing a significant shift as two major economies, Russia and India, move toward de-dollarization, dramatically reducing their reliance on the U.S. dollar in international trade. According to Russian Ambassador to India Denis Alipov, about 90% of the direct transactions between the two nations are now being conducted using their respective national currencies, signaling a marked departure from the traditional dollar-based trading system.
This strategic change, which has been steadily unfolding, represents a substantial development in the relationship between Russia and India, both of which are seeking greater economic independence from Western financial systems. Alipov highlighted that mutual payments in national currencies have remained stable, indicating a successful transition as both countries explore the long-term benefits of this shift. Trade statistics reflect the growth in this partnership, with bilateral trade reaching an impressive $64.5 billion in the first 11 months of 2024. Russia’s exports to India soared to $60 billion, reflecting a 7.7% increase, while India’s exports to Russia grew by 23.3%, totaling $4.5 billion.
In addition to growing trade volumes, Russia and India are also moving toward integrating their payment systems to further solidify their financial ties. Discussions are ongoing regarding the mutual recognition of Russia’s Mir and India’s RuPay payment systems. This integration marks a crucial step in reducing dependence on global payment platforms that are predominantly tied to the U.S. dollar, further fueling the de-dollarization efforts. However, the success of these integration efforts remains to be seen.
Russia and India’s strengthened economic partnership also extends into military-technical cooperation. The two nations have a long history of collaboration in defense, with Russian or Soviet-designed systems accounting for more than 50% of India’s weaponry, and up to 90% in some sectors. One of the standout joint ventures has been the production of the BrahMos advanced supersonic cruise missile, a collaboration that began in 1998. Alipov emphasized that the strategic military partnership continues to thrive, with Russia being a key contributor to India’s defense capabilities.
Looking ahead, the de-dollarization process is poised to have profound effects on global trade, especially as Russia strengthens its position as India’s second-largest supplier, following China. The success of national currencies in bilateral trade between Russia and India sets a powerful precedent for other nations considering alternative payment systems. The ongoing shift from U.S. dollar dependence is a clear indication that global trade patterns are evolving, and countries are seeking new ways to secure their economic futures independent of traditional financial hegemonies.
This growing trend of de-dollarization could have lasting consequences for the global economy, reshaping trade dynamics and financial systems in ways that could challenge the dominance of the U.S. dollar. With nations like Russia and India leading the way, the future of international commerce may become more diversified, with national currencies taking center stage.
