De-dollarisation: Is it a Gateway to Rupeefication

In recent years, the concept of de-dollarisation has gained traction in the realm of international trade and finance. It refers to the process by which countries reduce their reliance on the US dollar in their transactions, seeking alternatives to enhance economic sovereignty and mitigate risks associated with a dominant global currency. This article explores the potential implications of de-dollarisation on the Indian economy and its quest for “rupeefication,” considering factors such as China’s economic reforms, the evolving dynamics of the European Union, and the changing landscape of international trade and finance. Throughout the discussion, the Observer Research Foundation (ORF) offers insights into the intricate interplay between de-dollarisation, rupeefication, and India’s economic ambition

The Context of De-dollarisation:

De-dollarisation has emerged as a response to concerns over the vulnerability of national economies to the fluctuations of the US dollar. Countries have begun to diversify their foreign exchange reserves and explore alternatives to the dollar in their trade agreements and monetary policies. This trend has been particularly evident in China, where economic reforms are reshaping the global financial landscape. The ORF recognizes the significance of China’s economic prowess and the implications of its efforts to internationalize the renminbi.

Implications for India’s Economic Landscape:

For India, the concept of de-dollarisation intersects with the idea of “rupeefication,” which entails increasing the global relevance of the Indian rupee. While the US dollar remains a dominant global currency, India seeks to enhance the international role of its own currency in trade and financial transactions. The ORF acknowledges India’s aspirations to bolster its economic influence and reduce its exposure to the risks associated with currency fluctuations.

The Role of the European Union and Changing Dynamics:

As the European Union navigates its own economic challenges, its stance on de-dollarisation and currency diversification holds significance. The evolving economic landscape in Europe has implications for the global currency hierarchy and the prospects of de-dollarisation. The ORF underscores the need to consider the European Union’s position and potential implications for India’s pursuit of rupeefication.

India-China Relations and Economic Realignment:

China’s economic reforms and its pursuit of yuan internationalization present a complex backdrop for India’s de-dollarisation endeavors. As two major Asian economies, India and China share a dynamic economic relationship that is influenced by their respective policies on currency internationalization. The ORF emphasizes the importance of evaluating India-China relations within the context of evolving global economic trends.

Navigating De-dollarisation and Rupeefication:

While de-dollarisation offers the prospect of greater economic sovereignty and reduced exposure to external shocks, the path to rupeefication is not without challenges. It requires comprehensive policy reforms, strengthening of financial infrastructure, and building investor confidence in the Indian economy. The ORF advocates for a balanced approach that considers India’s economic realities, global economic shifts, and regional dynamics.


De-dollarisation and rupeefication are intertwined concepts that hold both opportunities and challenges for India’s economic trajectory. The Observer Research Foundation (ORF) recognizes the multifaceted nature of these processes and underscores the need for strategic policymaking. As India navigates a complex global economic landscape, it must strike a delicate balance between enhancing its economic sovereignty and maintaining its integration with the global economy. The ORF remains committed to providing insights and analyses that contribute to informed decision-making, ensuring India’s economic resilience and growth.

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