All-Encompassing Hug

M.K. Bhadrakumar

The lodestar of Prime Minister Narendra Modi’s talks with Russian President Vladimir Putin in Moscow on 8-9 July 2024, must be the disclosure by the deputy head of the presidential administration in the Kremlin, Maxim Oreshkin, that the two leaders discussed the topic of cash payments with the use of cards of national payment systems as an important element of trade support infrastructure and interaction in general.

Oreshkin added that the two countries are also putting in place an arrangement on interaction between their central banks on the issue of accepting national payment cards.

In one stroke, Modi electrified the forthcoming Brics Summit in Kazan in October. Modi also informed Putin that he will be attending the summit meeting. It is no secret that the Brics member states are seeking to improve the international monetary and financial system and are prioritising the creation of a platform that will enable them to conduct transactions in national currencies for mutual trade.

The Russian foreign minister Sergey Lavrov had announced after a meeting of the economic bloc’s foreign ministers in Nizhny Novgorod, Russia, last month that “Our agenda is extensive. It includes issues that will directly affect the future world order based on fair grounds.” Indeed, more and more countries are having doubts about Swift after many Russian banks were cut off from the Belgium-based financial messaging system following the start of the Ukraine conflict in 2022.

From the American perspective, the terrible beauty of Modi’s Russia trip is that behind his anti-war rhetoric, he created an ambience of high moral standing for Delhi that he promptly exploited to bring about a paradigm shift in India-Russia relations.

Make no mistake, Swift translates as US hegemony; it is about isolating Russia from the international financial system. And here we see India teaming up with Russia to create a payment system using local currencies. Notionally, this is not an anti-American move, because the bulk of trade continues to be in the US currency. Cynics may say India is running with the hounds and hunting the hares. But who cares? Americans must be going nuts. Oil, fertiliser, nuclear power plants, Anti Ballistic Missile system, joint development and production of weaponry—and now, an ecosystem that ignores Swift.

Prime Minister Narendra Modi with Russian President Vladimir Putin

Coincidence or not, Modi arri