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Indian Rupee (INR) conquers the world !

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India’s rise as a global economic power is evident from the growing number of countries willing to trade in Indian Rupee (INR) and the increasing acceptance of INR as a global currency. With 34 countries already agreeing to trade in INR and another 64 countries showing interest, the INR is quickly gaining acceptance as an alternative to the US Dollar. Currently, the INR is approved for use in 18 countries, with 12 countries at the MOU stage. The moment 50 countries start trading in INR, the International Monetary Fund (IMF) will be forced to declare the INR a global currency.

India is a major importer of various goods, including oil, gold, defence equipment, and electronic hardware. Of these, oil and gold are two significant items that make up a substantial portion of India’s imports. In recent years, India has been making efforts to diversify its sources of oil imports. Russia has emerged as India’s largest oil supplier, surpassing Saudi Arabia. This shift in oil trade has resulted in India making oil payments to Russia in Indian Rupees (INR), instead of US dollars (USD).

This move has not gone unnoticed by Saudi Arabia, which is losing market share to Russia. Saudi Arabia has traditionally been one of India’s top oil suppliers, and it cannot afford to lose this valuable market. However, the Saudi government is also aware that antagonizing the US, a key ally, is not an option.

To overcome this dilemma, Saudi Arabia is looking to negotiate a Free Trade Agreement (FTA) with India through the Gulf Cooperation Council (GCC). An FTA would allow for the exchange of goods and services between the two countries without any barriers or tariffs. By doing so, Saudi Arabia could increase its oil exports to India and receive payments in INR, thereby avoiding the use of USD and the ire of the US.

The UAE, which is India’s third-largest trading partner, has already begun accepting INR for gold purchases. This move has allowed India to reduce its dependence on USD for gold imports and has also helped the UAE diversify its foreign exchange reserves. In summary, India’s shift towards INR for oil and gold payments is part of a larger effort to reduce its dependence on USD and increase its trade ties with other countries. The move has been welcomed by some countries, such as Russia and the UAE, but has caused concerns for others, such as Saudi Arabia.

Furthermore, the EXIM trade in INR will validate the importance of the currency, and Russia is happy accepting payments for oil in INR as well as in UAE Dirhams. India has an offset clause for local manufacturing, resulting in 60-65% defence spending, and is taking rapid strides towards self-sufficiency.

The INR’s growing acceptance is also boosting India’s foreign currency reserves. With FDI topping USD 532 billion in the last 18 months, which is 50% of India’s FDI since 1947, it is clear that India is becoming a reserve currency and a store of value, alongside the US Dollar, Euro, and Gold. The TIME magazine has called the INR the future Dollar, and it is only a matter of time before all countries keep INR in their portfolio of global currencies. The irony is that China, an USD 18 trillion economy, has not been able to achieve this status, claiming that the Yuan is now accepted in two countries, but while keeping their names secret. The de-dollarization trend is gaining momentum, and it is only a matter of time before the world recognizes the INR as a global currency. However, it is essential to note that the INR’s success is not only due to India’s economic prowess but also its diplomatic efforts. India has established friendly relations with several countries, resulting in these countries showing interest in trading in INR.

India’s rise as a global economic power is a result of its growing economy and its increasing global influence. The INR’s growing acceptance is a testament to India’s success in establishing itself as a global economic powerhouse. The country’s future looks bright, and it is only a matter of time before the world recognizes India’s potential and accepts the INR as a global currency.

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