India advances e-rupee pilots, eyes BRICS CBDC link

India advances e-rupee pilots for welfare payments, targeting farmers and low-income groups. The initiative aims to curb misuse and may link with BRICS CBDCs to reduce dollar reliance.

India is accelerating the adoption of its central bank digital currency, the e-rupee, by routing a significant share of its $80 billion welfare system through around 10 pilot programs. These pilots, active in states like Maharashtra and Gujarat, focus on distributing programmable subsidies and food benefits to farmers and low-income households. The digital rupee enables targeted incentives, such as up to 80% support for irrigation systems, with payments redeemable only at authorized vendors to prevent misuse. In Gujarat, authorities aim to enroll 7.5 million households for subsidized food assistance by June. Despite these efforts, e-rupee usage remains modest compared to the Unified Payments Interface, which handles much higher transaction volumes. The Reserve Bank of India is also exploring linking its CBDC with those of other BRICS nations to reduce reliance on the U.S. dollar, a topic expected at the upcoming BRICS summit. The pilots aim to reduce leakage and corruption in welfare distribution while providing a practical use case for the e-rupee.