Morals and money – Manmohan Singh advises Modi to NOT ignore the dollar

A day after UK Prime Minister Boris Johnson landed in India, India’s former Prime Minister (PM) Manmohan Singh made a significant suggestion in the opinion piece titled ‘This is India’s moment of reckoning’ that appeared on the Hindu Business Line.

While the former Indian PM still doesn’t want India to explicitly take sides with the US or Russia, he wants the Narendra Modi government to acknowledge the might of the American dollar as the global reserve currency as well as the potential of the western countries as India’s trade partners.

Singh was part of the negotiations when India had opted for the rupee-ruble trade with Russia – while not aligning with either of the two sides – during the cold war. A similar plan was reportedly being considered by the Modi administration until last week when India’s commerce secretary ruled out the possibility.

The decision would be to Singh’s liking. “..a forced and hurried dismantling of this order (with dollar as the global reserve currency) and replacing it with rushed bilateral local currency arrangements can prove to be more detrimental for the global economy in the longer run,” he wrote.

India has been seeking an end to the violence in Ukraine but has not condemned Russia despite pressure from US and its allies. While Finance Minister Nirmala Sitharaman has asked why India should not buy oil at a cheap price when it can, India hasn’t gone for the option to settle bilateral trade with Russia in the respective national currencies.

“In the long run, India stands to gain from unfettered access to western bloc markets…,” he wrote while warning against the enticement of “cheap oil and commodities”.

Indian Finance Minister explains the decision to continue buying crude oil at cheap prices from Russia

Even now, the establishment at Washington D.C. is quite irked by India’s unwillingness to take its side, even in rhetoric. In the weeks following Russia’s invasion of Ukraine, officials from US and India exchanged barbs on public fora, expressing concerns over “human rights issues” in each other’s territory.

A long line of foreign dignitaries, from the Japanese Prime Minister Fumio Kishida to UK’s Johnson, have visited India since the war broke out. As the leader of the world’s largest democracy by population, Modi’s stance is being closely watched. The West would like India to denounce autocratic nations like Russia and China – something Singh has described as ‘free but principled trade that values both morals and money’. Johnson highlighted the same point before departing from London.

Singh highlighted that more than half the world’s population resides in countries that haven’t condemned Russia but form only a quarter of the world economy. They are mostly the producers whereas the western countries are today’s large consumers.