Daijiworld Media Network - Mumbai

Mumbai, Feb 21: India is intensifying efforts to diversify its currency exposure, secure supply chains and expand exports through free trade agreements (FTAs) in response to the US administration’s reduced engagement with the Indo-Pacific Economic Framework for Prosperity (IPEF), according to a new report by Think China.

The report underscores that currency diversification has become central to India’s economic security strategy, particularly at a time when reducing external dependence and enhancing self-reliance are seen as critical priorities. It highlights the growing traction of India’s sovereign digital currency, the e-rupee, which is increasingly being used for retail transactions.

Greater interoperability between digital currencies of BRICS nations could further expand the e-rupee’s role in cross-border trade, the report suggests. Several countries piloting sovereign digital currencies — including China, Russia, Brazil, South Africa, Saudi Arabia, Qatar, Indonesia and the UAE — are either members of BRICS or closely aligned with the bloc.

Beyond currency initiatives, India is also seeking to settle a larger share of trade in its local currency while strengthening supply chain resilience and pursuing multiple FTAs. The report notes that such agreements serve not only economic interests but also geopolitical objectives by fostering political trust and expanding India’s network of strategic partners amid a rapidly fragmenting global order.

It points out that during US President Donald Trump’s second term, Washington’s apparent lack of enthusiasm for IPEF slowed the momentum behind the “China plus one” diversification strategy. Additionally, unilateral US trade restrictions in 2025 prompted India and other major economies to accelerate diversification efforts away from the American market.

In recent years, India has stepped up FTA negotiations to broaden export destinations. It has concluded agreements with the UK, New Zealand, Oman and the EU, while also finalising trade deals with Australia, the UAE and the European Free Trade Association (EFTA). Negotiations with Israel, Chile and the Gulf Cooperation Council (GCC) countries are ongoing.