UPDATE 1-India may reduce U.S. dollar role in FX basket

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By Anna Willard

AIX-EN-PROVENCE, France, July 3 (Reuters) - The weight of the dollar in the basket of currencies that helps set the rate of India's partially convertible rupee currency INR=IN may be reduced, a senior Indian government adviser said on Friday.

Suresh Tendulkar, chairman of the prime minister's economic advisory council, said the Indian central bank was responsible for any change but he believed such a move was quite possible.

"The basket may undergo change. That's up to the Reserve Bank of India. They have to make a call which is the stability of the foreign exchange," he told reporters on the sidelines of an economics conference in the southern French town of Aix.

"I would not be surprised if they change it," (to reduce the weight of the dollar in the basket) he said.

Up until now, the U.S. dollar had been considered the main reserve currency in India, he said.

"India may change. That is something where no decision has been taken."

China has asked for a debate on a new global reserve currency when leaders from the Group of Eight (G8) meet with the G5 emerging economies next week in Italy, G8 sources told Reuters.