At a time of serious geopolitical tensions with the Russia-Ukraine war and US-Iran conflict subjecting the global economy to supply-side shocks, the BRICS grouping is expected to address challenges confronting the Global South. BRICS has always supported a multipolar, equitable, and democratic world order and demanded a greater voice for the Global South in the International Monetary Fund, World Bank, and United Nations. The perception of being an anti-US grouping has also brought the BRICS in the crosshairs of President Donald Trump who has threatened a 100% tariff as he believes plans to create a currency rivaling the US dollar are in the works. The reality is more complicated. While sanctions against Moscow and Sino-US trade tensions lend impetus for de-dollarisation, India wants to de-risk but does not wish to provoke the ire of the US.
How India navigates through these pressures as China — the dominant power within BRICS — has made progress to internationalise the yuan needs to be seen. India, for its part, is unlikely to support a yuan-anchored payment system within BRICS as it instead favours greater intra-bloc trade in national currencies. As summit chair, India obviously wants to stamp its influence on the outcomes as it believes that BRICS has relevance in a multipolar world that is rapidly rebalancing and perceives its role as an important voice for the Global South. Amidst scepticism about BRICS’ relevance, it must be said that institutional reforms have helped deal with the needs of the Global South. A case in point is the New Development Bank (NDB) which has emerged as an important option for the development needs of such countries.
Among the key deliverables anticipated from the summit is the Strategy for Economic Partnership 2030, which moves beyond individual initiatives towards a longer-term road map for co-operation in trade and investment, digital economy, financial cooperation, industry, innovation, and sustainable development. While that is a good way to go about it, experts believe there needs to be a sharp focus on specific initiatives that create economic value for members.
BRICS too could follow a similar approach in areas such as critical minerals, clean energy, and supply chains with the collective resources and manufacturing capacity being shared and leveraged. For its part, India will strive for stronger research ties and more government-to-government partnership across artificial intelligence (AI), advanced computing, quantum technologies, and semiconductor materials. This focus on frontier technologies comes against the backdrop of countries attempting to counter growing AI monopolies and de-risking global semiconductor supply chains. Media reports suggest that connecting chip design and deeptech startups across members via the proposed Startup Innovation Fund and Incubator Network is another target area.
Moreover, for the NDB to play a bigger role in both funding infrastructure creation in the BRICS member nations and also financing de-carbonisation of several sectors — as part of its climate finance initiative — it needs to be strengthened. Not only does the lender’s capital base need to be bigger, but it must also use the capital more efficiently. As of now, experts point out that the NDB’s leverage is lower than that of organisations like the World Bank or the Asian Development Bank. Experts also call for a more robust system for the grouping to be able to discuss the repercussions of policies of one nation on another. They draw attention to institutional forums at the European Union where the impacts of policies can be deliberated.