Trade, Currency, and Stability: Insights Resonating with Jagjiv Kumar Arora

In a world where global commerce is dictated by the whims of currency markets, it often takes a grounded voice with clarity of vision to redirect policy discourse. Mr. Jagjiv Kumar Arora, a living legend of India’s steel industry and a respected entrepreneur known for his pragmatic approach in the agro trade sector, emerged as one such voice of reason.

His compelling insights at two major international forums — the Institute of Directors (IOD) Convention in Dubai and later at the Global Business Meet hosted at the House of Lords, London — contributed meaningfully to the ongoing discourse around currency reforms in international trade.

While policy shifts stem from a range of strategic and diplomatic considerations, such perspectives often reflect the evolving thinking within trade and economic circles. It is in this broader context that India and the UAE later signed a Memorandum of Understanding (MoU) to promote the use of local currencies in bilateral trade — a move that resonated with many of the themes raised during these dialogues.

What’s particularly notable is that Mr. Arora reiterated this vision across both platforms, underscoring the critical need for currency reforms, especially in essential sectors like food and energy trade. It was not just a passing remark but a repeated emphasis, one that reflected his belief in stability over speculation.

As an observer, I might even note that this stance — practical, timely, and well-articulated — may have quietly contributed to shaping broader discussions, such as the ongoing BRICS deliberations around a common trading currency. While correlation is difficult to quantify, the coincidence of timelines and thematic overlap is hard to ignore.

The Currency Conundrum: A Chronic Trade Challenge For decades, traders have silently borne the brunt of volatile currency fluctuations — an invisible tax on cross-border commerce. Exchange rate instability often renders pricing unpredictable, erodes profit margins, delays payment settlements, and inflates hedging costs. In Mr. Arora’s words, “currency fluctuation leads to one-sided hedging and unfair mark-ups, especially in essential sectors like food trade. For a world grappling with hunger and malnutrition, such practices border on economic criminality.” Among the many downstream effects of currency fluctuation, the most damaging include: ● Exchange Rate Volatility: Sharp currency shifts can significantly impact profits and trade viability. ● Unstable Pricing Structures: Long-term contracts become risky, complicating supply agreements. ● Payment Settlement Delays: Currency conversion complications often delay international payments. ● Hedging Costs: While a hedge may protect against volatility, it comes at a steep financial premium. ● Conversion Losses: Traders frequently lose margins to unfavorable exchange rates or banking fees. It is against this backdrop of chronic inefficiency that Mr. Arora proposed a bold yet simple solution.

A Case for Local Currency Trade: Stability Through Simplicity Mr. Arora’s proposition — deeply rooted in practicality — emphasized the need for countries with strong bilateral trade relationships, particularly in critical sectors like food and energy, to explore local currency settlement frameworks. He pointed to the UAE’s own fixed exchange rate regime as a successful model. The dirham (AED) has long been pegged to the US dollar at a stable rate of 1 USD = 3.6725 AED. This peg has helped the UAE maintain price stability, particularly crucial for an import-reliant economy like its own.

“If a country like the UAE can benefit from the predictability of a fixed exchange rate, imagine the mutual gains if major trading partners like India and the UAE transact directly in a common currency,” Mr. Arora argued.

Historical Parallels: Learning from Barter Trade In his keynote address, Mr. Arora traced the roots of his philosophy to the barter system — one of the oldest yet most equitable forms of trade. Before fiat currency became dominant, goods were exchanged based on intrinsic value, ensuring fairness in transactions.

India has, in fact, leveraged such models in the past. During periods of global sanctions, the India-Iran oil trade famously adopted a rupee-rial settlement. Similarly, Indo-Soviet relations during the Cold War relied heavily on barter arrangements. Mr. Arora believes these historical precedents offer valuable lessons for present-day trade: “Trade doesn’t always need to be dominated by dominant reserve currencies. A balanced, fundamentals-driven approach to exchange can protect national interests and democratize global commerce.” Bridging the Gap Between Perception and Fundamentals One of Mr. Arora’s most pointed observations centered around the differencebetween perception-driven and fundamentals-driven markets.

In perception-driven markets, minor geopolitical tremors or media-fueled speculation can trigger outsized impacts on currency valuation. In contrast, a fundamentals-driven system — grounded in trade data, productivity, and real economic indicators — offers a far more resilient ecosystem. Introducing a local or regional trade currency, he contended, could insulate economies from such volatility. It would discourage speculative behavior, foster pricing stability, and allow exporters and importers to focus on real metrics rather than exchange-rate roulette.

The Outcome: Policy Inspired by Perspective It was this grounded logic, delivered without fanfare but rich in substance, that found resonance among policymakers in attendance. Mr. Arora’s words sparked conversations not just within diplomatic circles but also within ministries and trade bodies. In the months that followed, the governments of India and the UAE formally signed an MoU to explore and promote local currency usage in cross-border trade — a move widely seen as a step toward de-dollarizing bilateral commerce.

A Visionary Beyond Valuations While the world often celebrates entrepreneurs for unicorn valuations and aggressive growth stories, it is rare to encounter a business leader whose humility, clarity of thought, and long-term vision shape international economic policy. Mr. Jagjiv Kumar Arora is one such rare force — a grounded visionary whose voice rose above the din and became a catalyst for change. His repeated advocacy for currency stability, fairer trade frameworks, and practical reforms now echoes across policy corridors from Dubai to Delhi and perhaps, even within BRICS, as the world reimagines what fair global trade could look like.