Now India's UPI is going to be International Non Residential Indians Indians who live outside India Now, with the help of UPI Will be able to transfer money 2023's start can't be better than this But there is one more strategy and India is working in the background on it There's an action plan Through which not only UPI But our Indian rupee Can become international too Today the Indian rupee Needs to be transformed Needs to go international In today's video, step by step we will understand a complex idea That how does one currency become an international currency And if you like this video Then do share it with your friends Chapter 1: What is an International Currency? A few days ago, we were in Egypt And to pay the taxi fare We were short of egyption pounds Then the driver said, If you have US dollars, that's fine too It's not about just the taxi driver Its about every shop there Who were ready to sell things to us in US dollars In fact I think they prefer The US dollar over their own currency Why so? Because in many other countries Like their own currency Other currencies have some value too USD is an international currency An international currency is a currency which can be used for trade in multiple other countries It is also known as Actively Traded Currency You must have read it in history That there was no currency before People used 'Barter System' I'll grow tomatoes in my farm And if I need wheat Then I used to give my tomatoes and take wheat in return But it had many limitations That's why people made currency This piece of paper Whenever this paper gets exchanged One more thing gets exchanged And that is "trust" In that sense, even I can print a piece of paper like this And can put any amount on that But the problem is that Then only I will trust on it And if I trust it or not How does it matter? On a currency you need Other people to trust on it And the more number of traders trust on it The more value it will have A currency has no value without trust Let's take that tomato and wheat example And apply it in today's world Suppose India buys tea from Sri Lanka Sri Lanka buys sugar from China Now Sri Lanka will accept payment in a currency which can be used in future Which China will accept later Or else Sri Lanka will just have some Gandhi pictures stored Which they won't be able to use Let's rewind a bit Due to colonisation In world trade, British Pound had become an international currency And in 1944, after the Brettenwoods agreement All major countries decided that The US dollar will become a standard The world runs on oil And in 1973, America convinced OPEC countries to accept payment in dollars In this one moment America became a superpower Today, the US dollar, Euro, Japanese Yen British Pound And to some extent Chinese Yuan come in the category of international currencies Becaue apart from their own country Other countries value their currency Chapter 2: Why rupee needs to go international You must have read it in the news India's forex reserves have fallen to the lowest level When the dollar's rate keeps increasing Then the RBI, from their reserves starts selling dollars So that the supply is increased And the rate lowers down In 2022, the RBI spent more than 40 billion dollars for keeping Rupee stable Today the situation is that India is a net importer country Which means overall Our imports are way more higher than our exports And for all these imported goods we have to pay in dollars Difference between this import & export is known as Trade Deficit In the month of October only Our Trade Deficit was $26.91 billion No matter how many 'Atmanirbhar Bharat' slogans we raise The truth is that Our imports won't decrease And due to this in future Dollar's price is only going to increase But there is hope Chapter 3: Hope for Indian Rupee We analysed India's trade data of past few years And a hopeful number came in front There are 154 countries with whom India's exports are more than its imports This is a fact that A country like China Will never agree to trade in rupee And even trying to convince them for this is a waste But Bangladesh can agree Sri lanka can agree In fact, it has agreed too Sri Lnaka has agreed to trade with India in rupee And both the countries benefit from this If Sri Lanka doesn't have dollars today Then it can pay in Indian rupees Similarly, America has put sanctions on Russia So they can't trade in dollars Sri Lankan rupee in dollar's comparison has gone down by 84% And in comparison to Indian rupee Only 70% So for them, buying rupee is cheaper than buying dollars America keeps an eye on each dollar spent outside its country too Regulates it, controls it So Russia started trading with China in Yuan And after the Russia Ukraine conflict Trade has increased between Russia & China Similarly, in Russia's matter With India too Trading in rupee can happen By Rupee becoming international India will of course benefit But two types of countries will benefit from it a lot Countries like Sri Lanka Which do not have dollars And countries like Russia who cannot trade in dollars Let's understand how trade happens in today's world Let's assume, B is a car dealer in India Who is importing cars from A Who is a dealer in France Now for payment, B will go to his Indian bank with his Indian rupees Indian bank will convert it in Euros And pay it to the foreign bank Then the foreign bank will transfer euros to France's dealer 'A' And then the cars will be shipped from France to India Now this situation is going to change Now RBI has started A special Vostro account system Here, foreign banks can open Indian Rupee accounts for trade Suppose France opens a Vostro account with SBI Now, when the Indian dealer B Imports cars from France He doesn't have to pay in euros But in rupees only These payments are to be done Not in a foreign bank But India's SBI only In this vostro account of France Indian rupees will be deposited Then what will they do with those rupees? France can spend the rupees from its vostro account On exporters in India By buying goods from them Which means, Indian exporters will also get paid in Indian rupees only Which means, Indian money won't go out of India That's the plan There are 35 countries today Who are ready to trade in Rupee If India is successful in achieving this Then in this decade, It will be the biggest international win for India Chapter 4: The real challenge Convincing countries like Russia and Sri Lanka is possible And work is going on in that direction Then convincing whom is difficult? Saudi Arabia UAE Because in the whole financial year After all trade is done Between UAE and India There is $ 12 billion of surplus Between Saudi and India There is $ 20 billion of surplus In a simple language, We sold them tomatoes They sold us wheat And even after that We bought more wheat worth $ 12 billion and $ 20 billion from them Today these payments are done in dollars So they can use these dollars anywhere They can give it to any other country They can invest anywhere else They can buy assets from them But if this excess money is left with them in Rupees Then what's the use of it for them? This is a big challenge for India For which, RBI and Government Both have to bring huge policy changes And we have to reduce our trade deficit Basically we have to increase our exports And apart from trade How can Rupee be used We have to think about that Foreign investors need to be incentivised for making Rupee investments in India Now this topic is very complicated for this video So, we will explain it in another video Chapter 5: Is it so simple? If all these things can be explained in 5-10 min video Then why does India not do anything? The answer is Talking is easy But executing those things is equally hard Let's take China's example China is trying to do all these things from 2009 itself And till now has reduced Only 2% of US dollars share US dollar is not just a currency Its a weapon It's dominance is so huge How each US dollar can be spent throughout the world is controlled by US FED which is America's central bank If tomorrow, they put sanctions on India Then we won't be able to buy oil in dollars Already oil prices are increasing And it will increase more And to pay other countries in dollars we will buy more dollars Today, dollar's price is Rs. 82 Experts say that this number can go upto 90 to 100 And here, India may commit One big mistake Of not taking the right steps in time If you got any value from this video You got to learn anything new Then do share it with your friends Because the truth is, the whole world Is going through an economic crisis It was started in 2020 But when will it end? No one knows Like Pakistan and Sri Lanka India's economy is also under pressure And this pressure Will strengthen us or break us Only time can tell this And by sharing this important message with you makes a difference to me