India is using its welfare system as the e-rupee’s best shot at relevance, routing subsidies for farmers and food recipients through about 10 central bank digital currency pilots. The goal is practical as much as political: reduce leakage in the country’s roughly $80 billion welfare machine and give a slow-moving token a reason to exist.
In Maharashtra, programmable subsidies cover up to 80 percent of drip-irrigation costs and can only be spent with approved vendors, while a pilot in Gujarat aims to bring all 7.5 million subsidized-food households onto the digital rupee by June. That matters because adoption has been stubbornly thin, with about 10 million users and roughly $3.6 billion in transactions since launch in late 2022, far behind the Unified Payments Interface, which handles about $300 billion each month.
The welfare push also doubles as a test of whether a CBDC works better when it is tightly controlled. Supporters say the system can cut fraud and speed delivery; critics say heavily programmed money chips away at the cash-like flexibility that made digital currency appealing in the first place.
That domestic experiment now feeds into a bigger bet: the Reserve Bank of India wants to push a plan to link CBDCs across BRICS economies at the bloc’s 2026 summit. But any move to reduce dollar dependence risks provoking U.S. retaliation, and President Donald Trump has already threatened tariffs on BRICS countries pursuing alternatives to the greenback.