Discuss how relevant BRICS initiatives on local-currency trade and cross-border payments are to the reform of the international financial architecture.

The international financial architecture rests on the Bretton Woods institutions, voting weighted by quota and payments that run mainly in dollars. It still reflects the balance of power after 1945. The New Delhi Declaration of the XVIII BRICS Summit (September 2026) called for a "more representative and fairer international order". It promoted local-currency trade and interoperable cross-border payment systems [1]. These steps matter for reform, but they hedge against the current system step by step rather than replace it.

Relevance to reform

• Lower currency risk: settling trade in local currencies cuts conversion costs and exposure to dollar-liquidity shocks. RBI's 2022 framework lets trade be invoiced and settled in INR through Special Rupee Vostro Accounts [2].
• Development finance: the NDB aims to give 30% of its financing in local currencies over 2022–26, which reduces borrowers' foreign-exchange risk [3].
• Resilient payments: connecting national payment networks reduces dependence on Western correspondent banking. This is reform through technical plumbing, not confrontation [1].
• Bargaining leverage: an alternative that already works gives more weight to the Global South's demand for a bigger voice in the IMF and World Bank [1].

Limitations

• Dollar dependence persists: in March 2022 the NDB put new transactions in Russia on hold, citing "restrictions" [4]. BRICS' own bank obeys the system it criticises.
• Trade imbalances: a partner running a surplus piles up currency it cannot easily spend, so it turns back to dollars.
• Divergent interests: the Declaration speaks of interoperability, not a common currency [1]. This reflects India's caution about its ties with the US and its unease with China's ambitions for the renminbi.
• Words over results: the Economic Partnership Strategy 2030 sets no measurable targets [1].

Way forward

• Set yearly targets for the share of intra-BRICS trade settled in local currencies.
• Deepen local-currency bond markets so the NDB can borrow and lend in local currencies.
• Keep payment links technical and transparent, so they do not attract sanctions or tariff retaliation.

Overall, the local-currency and payment initiatives make the system more plural and resilient for developing economies. Their limits show that BRICS is adding to the existing architecture, not replacing it. If BRICS sets measurable targets and runs these tools prudently, they can support quota reform and SDG 10.6 (a greater voice for developing countries in global financial institutions), in line with India's multi-alignment approach.