It is in India's interest to move as far away as possible from fellow manufacturers (especially the ones we actually have an active border conflict with). It makes sense to forge close investment/trade partnerships with large consumers (US, EU, middle east etc) - not with a competitior that has been systematically exploiting market access and flooding foreign markets with cheap subsidized goods. It is also why the GoI is trying to pull out from their FTA with ASEAN.
Agreed, But it is even more to India's interest to have a trade and reserve currency it controls or at the very least, is one of the ones it controls. This is by far the greatest burning need for India's economic security. This is why no one can sanction UNKIL.
India balances a systematic twin deficit - the GoI and the RBI take their currency sovereignty very seriously (the reason why they killed crypto). There will be no BRICS (a grouping that counts a bunch of sanction hit nations among its members) currency in India - the GoI will stay miles clear off a trade/investment/currency bloc with prc in it.
It remains to be seen what the USD alternative is going to be- either a BRICS currency we have a say in or a basket of currencies, of which ours will be one of the few as well ( along with Yuan, Rubles, Dollars, etc).
Either scenario is far greater benfit to Indian fiscal future than that of the USD. Indian govt understands this, is why we are in the process of ditching the USD as much as possible in our current G2G transactions.
The monopoly over circulating currency is the fundamental indicator of a government's legitimacy and authority; they won't peg the INR against a BRICS currency just to get back at the US$.
We dont have to. Its yankee sophistry to argue that 'its either our currency or someone elses singular currency' as scaremongering to shore up the USD. Our own currency can serve as the peg and yes, India is giving all economic indicators that it WILL consider an alternative to the USD with great interest.
India has a long term target of taking the INR global and hence, keeps pitching the currency - on a limited scale. When they talk of 'deprioritizing' the US$ they mean this only. It will take further reforms/liberalization of the INR regime and a more mature (and bigger) economy to 'internationalize' the INR on a bigger scale. They are willing to wait out till then.
Incorrect assessment of India's goals and movements to some degree. yes, we do want our currency to be a reserve and traded currency. Every currency sovereign does. Right now and for the last 300 years, currency markets have had a singular hegemon, at least in the western world and thus by default, rest of the world, for the last 200 years. Current hegmon is USD ( prior hegemons are GBP, Dutch Guilders,etc).
India wishes to gang up on the USD to topple the USD by G2G trading with non-USD currencies. Both with ourselves and between non us nations, so we can kill the king. Yes, we know RMB will occupy a bigger chunk of the fallen hegemon's fiscal territory, but we will have a share of the pie, so will the Rus and so will any other de-couplers from the USD as it sinks. So we prefer this scenario of 'currency warlordism' over direct challenge of the paramount overlord to take down the overlord 1v1 in future as you indicate.
That path is far less of a desirable one for the indian govt., since US can easily cut down a currency challenger from developing to that level in the first place, by forcing them to buy treasury bonds or face currency manipulation, such as they did with Japan in the 80s to kill the Japanese challenge to USD.
In this sector, the needs and wants of pretty much every BRICS members converge strongly, hence we are collaborating on this.
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