NEW DELHI, July 11:  US President Donald Trump has proposed a 10 per cent tariff on all BRICS nations for conducting trade in non-dollar currencies, overlooking that such moves were prompted by Washington’s own economic and geopolitical actions, economic think tank GTRI said on Friday.

  BRICS members are India, Brazil, Russia, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia, and Iran.

The Global Trade Research Initiative (GTRI) said the US sanctions and SWIFT bans on countries like Russia, Iran, and Venezuela, have blocked dollar-based payments, forcing nations like India and China to trade in local currencies with Russia.

SWIFT is a global messaging system that routes payment instructions between banks worldwide.

“The shift from dollar wasn’t a revolt; it was the only route left,” GTRI Founder Ajay Srivastava said, adding “over 90 per cent of Russia-?China trade is now settled in rubles or yuan; India pays for Russian oil in rupees and dirhams; even Saudi Arabia is open to non-dollar oil trade — cracking the 1970s petrodollar pact”.

“Trump ignores the fact that it is the US actions that forced countries to search for the dollar alternatives in the first place,” it said.

He added that Trump’s 10 per cent tariff plan on BRICS and 500 per cent penalty on countries buying Russian oil makes it difficult for countries to negotiate trade deals with the US.

“In essence these deals are MASALA deals — Mutually Agreed Settlements Achieved through Leveraged Arm… India must stay cautious,” he said.

Srivastava further explained that SWIFT connects over 11,000 banks in over 200 countries and was designed to be a neutral platform for trade-related payments.

But under US pressure, he said, SWIFT has blocked access to countries under American sanctions, like Iran, Venezuela, and Russia.

“As a result, countries importing oil and gas from sanctioned suppliers had no option but to bypass the dollar. India pays for Russian crude in rupees and UAE dirhams through non-SWIFT channels. China uses yuan to settle Russian gas trade. This isn’t an anti-dollar strategy — it’s a survival mechanism triggered by US sanctions,” the GTRI said.

In 2022, the RBI allowed trade settlements in Indian rupees, helping countries with dollar shortages, it said, adding Russian banks opened rupee accounts in India for oil payments.

“India has rejected China’s call for a BRICS common currency,” Srivastava said.

On the issue of trading in local currencies, he said it is a country’s sovereign right as with proper planning local currency trade can cut transaction costs by up to 4 per cent by avoiding double-dollar conversions at both the buyer and seller end.

“As more countries realize these savings, local currency trade is likely to grow,” he added. (PTI)