Despite India's significant push for the interoperability of BRICS payment systems and central-bank digital currencies during its chairmanship, the recent New Delhi Declaration notably omitted any firm commitment, leaving the long-standing goal of local currency trade without a concrete payment architecture.
Key Points
- India's proposal for linking BRICS payment systems and central-bank digital currencies (CBDCs) was not included in the New Delhi Declaration.
- The omission is significant as cross-border payments were a key agenda item during India's BRICS chairmanship.
- The declaration only 'acknowledged' the work of the BRICS Payment Task Force (BPTF) on exploring efficient cross-border payment mechanisms.
- Experts believe that without a coordinated action plan, trade in local currencies is unlikely to reach significant volumes despite gradual growth.
- Discussions on local-currency trade settlement have been ongoing for over a decade within BRICS, with slow and incremental progress.
India's push to link the payment systems of BRICS countries, including through the possible interoperability of central-bank digital currencies (CBDCs), has not found its way into the grouping's New Delhi Declaration, leaving its 16-year effort for trade in local currencies without a settled payment architecture.
The omission is significant because India had made cross-border payments a key element of its agenda for BRICS chairmanship.
Reserve Bank of India (RBI) Governor Sanjay Malhotra had said last month that BRICS countries were discussing ways to link fast-payment systems and CBDCs.
Commerce and Industry Minister Piyush Goyal last week urged BRICS members and partner countries to link payment systems and trade in local currencies.
BRICS Declaration's Stance on Payments
Instead, the declaration adopted by the BRICS leaders on Saturday only "acknowledged" the work of the BRICS Payment Task Force (BPTF) on exploring pragmatic solutions on efficient cross-border payment mechanisms.
The work draws on the guidance provided in the Kazan and Rio Declarations on the BRICS Cross-Border Payments Initiative.
"We acknowledge the work done to study the cross-border interoperability of payment and messaging channels, and 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," the declaration said, implicitly highlighting the differences among member countries.
Linking official digital currencies of member-countries could have allowed payments initiated in one country to be settled more directly in another country's currency, reducing reliance on correspondent banks and third-country payment channels.
Expert Views on Local Currency Trade
Ajay Srivastava, founder of the Global Trade Research Initiative, said the summit was expected to announce steps to expand local-currency trade through greater invoicing and settlement in national currencies, wider bilateral payment arrangements, links among domestic instant-payment networks, and further work on connecting central-bank digital currencies.
"Instead, the New Delhi Declaration offers no firm action.
"Without a coordinated action plan, trade in local currencies may grow gradually but is unlikely to reach significant volumes," he added.
Interoperability would let countries keep their own currencies and financial systems.
A common BRICS currency, on the other hand, would require countries to give up much more control, including agreeing on how the currency is issued, exchanged and backed, and how to deal with countries that run persistent trade deficits or surpluses.
Decade-Long Discussions and Future Outlook
Briefing reporters on Saturday, Sudhakar Dalela, economic relations secretary in the Ministry of External Affairs, said discussion on trade settlement in local currencies had been underway at BRICS for more than a decade.
"We believe local-currency settlement is a practical mechanism to reduce transaction cost in bilateral trade," Dalela said, adding that there was no proposal for a BRICS currency "as of now".
The chronology of talks on local-currency trading at subsequent BRICS summits shows slow and incremental progress.
In Brasília in 2010, the four original Bric members agreed only to "study feasibilities of monetary cooperation, including local currency trade settlement arrangement".
That was the first explicit summit-level commitment to examining trade settlements in local currencies.
There was little movement in the next few declarations.
The Ufa Declaration, in 2015, said BRICS recognised "the potential for expanding the use of our national currencies" and asked authorities to continue discussion on wider use in mutual trade.
The 2017 Xiamen Declaration was more substantive, committing members to enhance currency cooperation "including through currency swap, local currency settlement, and local currency direct investment, where appropriate".
The focus then gradually shifted to payment infrastructure. In 2018, the leaders backed greater financial-market integration and continued currency cooperation.
The 2019 Brasilia Declaration acknowledged the importance of a "BRICS Survey on International Payments System".
In 2020, the leaders welcomed continuing work on cooperation in national payments system and the BPTF, while the 2021 New Delhi Declaration acknowledged its "fruitful cooperation" through dialogue and discussion.
The 2022 Beijing Declaration again backed the BPTF as a platform for exchanging experience and knowledge.
The language became more explicit in 2023.
The Johannesburg Declaration welcomed experience-sharing on payment infrastructure, including "the interlinking of cross-border payment systems", while stressing local currencies and stronger correspondent banking networks.
The leaders asked the finance ministers and central bank governors to "consider the issue of local currencies, payment instruments and platforms&nquot;.
The 2024 Kazan Declaration welcomed local-currency settlements under the voluntary and non-binding BRICS Cross-Border Payments Initiative and again called for considering payment instruments and platforms.
In 2025, Rio acknowledged "possible pathways" towards the "potential for greater interoperability of BRICS payment systems" and welcomed a technical report titled "BRICS Cross-border Payments System" that is still not in the public domain.
With China taking over the BRICS chair from India, its position on moving the payments agenda from discussion to greater interoperability will be critical to the pace of progress.
