De-Dollarization Accelerates: Two Nations Settle 60% of Trade in Local Currencies, Sideline USD
April 7, 2025 — In a major development signaling the growing momentum of de-dollarization, two key trading partners have announced that they now settle 60% of their bilateral trade using local currencies, significantly reducing reliance on the U.S. dollar.
The countries involved — India and Russia — revealed the figures in a joint statement following high-level trade talks in New Delhi. The move is being hailed as a milestone in a broader global trend where nations are seeking to reduce their dependency on the U.S. dollar for international trade, a trend that has gained traction in recent years due to shifting geopolitical alliances, sanctions, and a desire for greater financial autonomy.
A Shift in Global Trade Dynamics
Officials from both countries confirmed that the increase in local currency trade was facilitated by bilateral agreements signed over the past year, alongside enhanced banking infrastructure to support rupee-ruble transactions. Key sectors involved in the local currency trade include energy, defense, and agricultural commodities.
"Settling trade in our own currencies not only strengthens economic sovereignty but also shields us from external financial shocks," said Russia’s Minister of Economic Development, Maxim Reshetnikov. “This is a step toward a more multipolar financial system.”
India’s Finance Ministry echoed the sentiment, emphasizing that the move benefits both countries by saving on currency conversion costs, streamlining transactions, and promoting regional stability.
Part of a Larger Trend
De-dollarization isn’t isolated to India and Russia. Over the past two years, several countries including China, Brazil, Iran, and South Africa have made similar moves to settle trade in yuan, real, and other national currencies. The BRICS alliance has also intensified discussions around creating a joint settlement currency for internal trade.
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Analysts point out that while the U.S. dollar still dominates global trade — accounting for around 58% of global forex reserves and nearly 90% of forex transactions — the growing number of local currency deals is slowly chipping away at its hegemony.
Challenges Remain
Despite the progress, experts caution that challenges remain in scaling up local currency trade. Currency volatility, limited liquidity, and the lack of international trust in some local currencies pose significant hurdles. However, as bilateral ties deepen and digital infrastructure improves, these barriers may continue to erode.
“While we are far from a post-dollar world, this development is part of a visible shift,” said Priya Shah, a geopolitical analyst at Global Insight Group. “The world is inching toward a more diversified financial order.”
Conclusion
The decision by India and Russia to conduct the majority of their trade in local currencies marks a notable step forward in the de-dollarization movement. As global power dynamics continue to evolve, more nations may follow suit — reshaping the future of international finance.
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