India has always been ambitious, especially after India's GDP surpassed that of the United Kingdom, and it is determined to become one of the top three economies in the world, hoping to become a world power with real international influence.
To this end, India has grasped industrialization with one hand and internationalization of its own currency with the other.
Seeing that Russia and other countries are actively promoting local currency settlement, India is quite enthusiastic, however, it backfires, and the road of rupee internationalization is really not easy to follow.
Some time ago, India's Ministry of Oil admitted that global oil ** traders refused to accept rupees, and during the 2022-2023 fiscal year, India has not reached a single transaction to settle oil in rupees, nor has it signed an agreement.
At a time when the Indian rupee could not be sold, India was in trouble with the International Monetary Organization.
According to Nikkei Asia on December 31, India has clashed with the International Monetary Organization, which accuses India of excessive intervention in the exchange rate, while India accuses the International Monetary Organization of unfair assessments, which do not understand India's domestic needs.
It has to be said that the IMO is not very optimistic about the Indian rupee itself, and India's own problems cannot be ignored.
First of all, India has always been a low-exporting country, with only 2% of the global export share, which is a fatal obstacle to the internationalization of the Indian rupee. India is interested in achieving local currency settlement with other countries, but India lacks both hard currency such as energy and industrial products, and other countries cannot spend it when they get Indian rupees.
Secondly, India's own monetary policy has also made the world question the credibility of the rupee, after all, Modi's "demonetisation order" is also a matter of recent years, and no one can predict when Modi will implement the "demonetisation order" again.
India's inflation and long-term account deficit have led to a lack of confidence in the Indian economy, and India is pushing for the internationalization of the rupee, hoping to use the internationalization of the rupee to issue local currency bonds to finance India's budget deficit.
In this context, India's implementation of the internationalization and de-dollarization of the rupee is obviously reluctant. In addition, from 2022 to 2023, the Indian rupee has fluctuated significantly against the US dollar, and the International Monetary Organization has questioned India's excessive manipulation of the exchange rate.
The internationalization of the Indian rupee has suffered a series of setbacks, and it can be said that the assessment of the International Monetary Organization has made India's situation even worse. India can fully evaluate the International Monetary Organization, but it will not be able to get other countries to agree with the rupee and change the status quo that the rupee is difficult to spend.
Russia has always been friendly with India, and India is Russia's second largest oil exporter, but this is the case, and Russia also rejects the rupee, let alone other countries. For Modi, instead of rushing to internationalize the rupee, it would be better to address India's industrialization as a priority.