Assess the case for greater local-currency lending by the New Development Bank as an alternative to full de-dollarisation.

The New Development Bank (NDB), approved in 2014 to mobilise resources for infrastructure and sustainable development in BRICS and other emerging economies supplementing existing multilateral institutions [1], now targets 30% of total financing in local currencies under its General Strategy 2022–26 [2]. With India chairing the 18th BRICS Summit at New Delhi [3], this offers a pragmatic middle path.

The case in favour

• Currency-risk mitigation: borrowers repay in the currency their projects earn, insulating long-gestation infrastructure from dollar volatility and US monetary tightening.
• Corrective to the voice deficit: the IMF's 16th General Review raised quotas by 50% but left quota shares unchanged [4]; incremental financial innovation is more feasible than stalled Bretton Woods reform.
• Market deepening: local-currency bond issuance widens domestic debt markets and creates benchmark yield curves in member economies.
• Institutional fit: it stays within the NDB's stated supplementary mandate [1], distinct from the Contingent Reserve Arrangement, which handles short-term liquidity through currency swaps [1].

Limits to the case

• Shallow, thinly traded bond markets and limited capital-account convertibility (including the rupee) cap the achievable scale; hedging costs raise effective lending rates.
• Concentration risk: with the yuan the deepest BRICS currency and the NDB headquartered in Shanghai, gains may disproportionately strengthen Beijing's position.
• The Bank's ratings and market borrowing still rest on hard-currency credibility, constraining a rapid shift.

Why it beats full de-dollarisation

• Displacing the dollar requires a credible reserve currency, open capital accounts and deep liquidity — none presently available to BRICS, which lacks a single geopolitical identity.
• Local-currency lending is incremental, reversible and technical, aligning with India's "non-West, not anti-West" positioning and preserving ties with Western partners.

Local-currency lending is therefore the realistic ambition, not a lesser one. India should press for capital infusion, wider membership — Bangladesh and the UAE have already joined [1] — and guarantee instruments that de-risk such loans, making the NDB a credible SDG-financing partner rather than a currency battleground.