India–Russia Ties Challenge Dollar Dominance and U.S. Hegemony

Part 2: Through symbolic diplomacy and strategic trade in mutual currencies, India and Russia are signalling a new multipolar world order that undercuts American economic control.

The recent bilateral meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin in India has sent shockwaves through the corridors of power in Washington. Despite intense international pressure aimed at preventing the summit, the two leaders held a frank, unembellished dialogue that defied diplomatic conventions They met at the airport, breaking all formal protocol, shook hands warmly, exchanged embraces and even left together in the same vehicle. This simple but symbolic gesture was a clear diplomatic message India and Russia will no longer take dictation from the United States. India is a sovereign nation exercising full freedom in shaping its foreign policy and independently deciding with whom to engage in trade or alliances, regardless of whether others approve or object.

Veiled Threat

The symbolism extended further given the backdrop against which this meeting occurred. A day before Putin’s arrival, India’s entire major airport network was crippled by a massive cyberattack. Microsoft reported glitches in its systems that led to widespread flight cancellations. When Indian authorities inquired, Microsoft insisted that all its servers were functioning smoothly. In reality, airports were paralyzed, a fact that effectively served as a stark warning from the United States which meant to say ‘do not cross the red line, we control the levers behind the scenes.’ This was a direct message to both Putin and Modi that America was watching and controlling their every move.

Yet, India pushed back decisively. The warm embrace between Modi and Putin at the airport symbolized India’s rejection of American attempts at dominance and control-a resounding assertion of India’s independence, sovereignty, and bold foreign policy. This meeting was not just a diplomatic-event, it was a declaration of intent and power.

Bilateral Trade

One of the most significant points of contention between the U.S. and this budding India-Russia partnership is their shift in bilateral trade currency. U.S. President Donald Trump reportedly found this most irksome. President Putin himself revealed that nearly 96 percent of trade between India and Russia is now conducted in their respective currencies-the Indian rupee and the Russian rouble, effectively sidelining the U.S. dollar. This marks a clear move towards ‘de-dollarization.’

International trade payments primarily rely on the SWIFT system-a payment messaging platform dominated by Western countries. However, Russia has been excluded from SWIFT due to sanctions imposed by the U.S. and its allies. In response, India and Russia have entered into an agreement to conduct digital transactions using the rupee and rouble, eliminating the need for dollar involvement. Since these digital payments depend only on internet connectivity, they bypass SWIFT’s expensive, controlled infrastructure. India is executing similar agreements with other key nations to facilitate digital payments. This burgeoning ecosystem of digital, dollar-free trade deeply unsettles Washington, which views the present global financial order as vital to its economic and geopolitical control.

The United States has long sought to maintain control over global financial flows to assert its supremacy and influence. The dollar’s dominance enables Washington to dictate terms to other countries, even leveraging economic sanctions that can cripple economies. But the independent financial model emerging between India and Russia poses a direct threat to this hegemony.

Today, Russia’s economy exceeds two trillion U.S. dollars, while India’s economy has crossed the four trillion-dollar mark. Both are influential members of the BRICS bloc, Brazil, Russia, India, China, and South Africa, which promotes economic cooperation and self-reliance among its members. China and Brazil, other major BRICS economies, also favour de dollarization. South Africa, with tense ties to the U.S., is expected to join this trend soon. Countries like Iran, the UAE, Egypt, Ethiopia, and Indonesia are also under consideration for such currency transitions, though their moves remain tentative.

The question arises why is the world’s greatest power, the United States, so troubled? Even if just one or two percent of global trade happens outside the dollar, it directly impacts the American economy. If India, Russia, and China start conducting transactions in their mutual currencies instead of the dollar, about 27 percent of the world’s economy would move away from the dollar. This would have a profound effect on the U.S. economy and could destabilize it.

Meanwhile, the global trade ecosystem continues to revolve largely around the U.S. dollar, which effectively holds the whole world hostage. The dollar dictates not only trade terms but also the dynamics of critical commodities such as oil. For instance, India currently buys oil from Russia using Indian rupees, a practice that deeply unsettles Washington despite no objection to the oil purchase itself. If India bought Russian oil in dollars, the US. would have no qualms, the disruption lies in the bypassing of the dollar.

These dynamics signal a new assertive phase in India’s foreign policy. Prime Minister Modi’s vision has nurtured a strong, self-reliant India that actively shapes global geostrategic currents rather than passively following others’ lead. The result is a multipolar geopolitical order that unsettles the U.S., which has long desired a unipolar world with Washington at the centre.

Surging Economy

India today is the fastest-growing major economy, aspiring not only to increase its trade footprint but also to open reciprocal markets. Putin’s large delegation to India emphasizes this focus. Russia seeks to sell its products in India at scale and expects India’s goods to enter the Russian market in return. This signifies a deeper and more balanced economic partnership that transcends mere symbolism.

India’s trade with China is also evolving uniquely. Not long ago, Chinese markets banned Indian products outright, but now Indian goods-from soft toys to spices and plastic items are readily available in Chinese supermarkets. India-China flights and visa services have resumed, including the introduction of “K-Visas” that allow Indian IT experts to work in China. This collaboration is part of a strategy for the two nations to jointly counter American dominance in the software sector.

The shift in relations is partly due to China’s isolation on the global stage. Beijing’s only semblance of an ally, Pakistan, is in deep political and economic turmoil, increasingly dependent on the United States. Therefore, China sees strategic advantage in closer cooperation with India and Russia to create a strong tripartite alliance, promising economic prosperity and geopolitical clout.

Still, scepticism remains. China’s history of duplicity leaves India wary of placing too much trust in Beijing. Nevertheless, the pragmatic need for cooperation in a competitive global environment shapes this complex relationship.

The India-Russia rapprochement, punctuated by moments of bold symbolism and pragmatic agreements, signals an evolving world order. India’s growing economic heft, military modernization backed by Russian technology, and strategic alliances are gradually undermining the unipolar American-dominated global order.

As BRICS members and other nations contemplate mutual currency trade to reduce dollar dependence, the foundations of American economic supremacy are visibly shaking. China’s ambivalent stance underscores the geopolitical uncertainty and flux defining the times.

For India, navigating this complex landscape requires balancing sovereignty, strategic partnerships, and economic growth without falling into new dependency traps. PM Modi’s vision of an assertive, global India is reshaping international politics. The world is witnessing a gradual but unmistakable shift towards a multipolar order where power is shared, not centralized, a shift that may redefine global relations for decades to come.