India Has Ambition to Become Asian Economic Gem and Make Rupee a Hard Currency

Indian Prime Minister Narendra Modi at the 20th ASEAN Summit in Jakarta said: “ The 21st century is the century of Asia. There is a need to create a post-industrial rules-based world order and focus on people's well-being. The progress of a free and open Indo-Pacific and a stronger voice for the global South is in the interest of us all”.

In its turn, Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, earlier suggested India aims to make the rupee a hard currency within a decade as it looks to increase the use of the rupee in global transactions, especially those related to South Asian countries.

Sanyal emphasized that India's efforts to promote the internationalization of the rupee "has nothing to do with de-dollarization", and its desire is to add the rupee to the list of existing hard currencies such as the euro, Japanese yen, Singapore dollar, British pound and RMB.

"The world already has a lot of hard currency as this (using the rupee in global transactions) becomes more common, other countries will be more willing to hold Indian bonds as part of their foreign exchange reserves." Next goal for the rupee will be to become part of the IMF's SDR basket. Then the rupee will become an integral part of the global financial system," Sanyal added.

Internationalization of Indian rupee refers to the recently granted permission to increase cross-border transactions of Indian currency, especially in import-export trades followed by other current account transactions and then capital account transactions. This would enable the international settlement of trade in Indian rupees in foreign trades, as opposed to other currencies including USD.