India's push towards De-dollarization
De-dollarization refers to reducing dependency on U.S. dollar: As a reserve currency for international transactions.
How: De-Dollarization process involves substituting the dollar in various financial transactions of significance like: trading oil, foreign exchange reserves, and bilateral trade agreements.
Need for De-dollarization:
Geo-Politics:
USA Imposing sanction on other countries, continuing and funding wars etc have triggered political tension, resulting in rise of new geopolitical blocs that are showing resistance against US dominance and adopting de-dollarization as a counter measure.
Artificially tweaking exchange rate:
Dollar being dominant currency in global trade, it entitles USA to manipulate with its currency and get unfair advantage in trade with other countries.
Economic domination of US:
While US's economic growth is less dependent on rest of the world, dollar's dominance in global trade literally hands over in golden plate to USA, significant amount of control over global economy, which US is known to have used in economic coercion, election interference, funded political violence and separatism etc threatening the sovereignty of dependent countries.
Risk of Financial Crisis:
Being most preferred currency in global trade, many economies have become too dependent on US economy. So, any crisis in US economy always used to have ripple effect on global economy.