The challenges for BRICS in a changing world order, Pg16

Key Highlights:

• India is hosting the 18th BRICS Summit in New Delhi on September 12 and 13, marking 20 years since the group's formalization.
• The expanded 11-member BRICS now accounts for approximately 36.8% of global GDP (PPP), surpassing the G7's share of below 29%.
• The grouping, initially BRIC, expanded significantly in 2024 and 2025 to include Egypt, Ethiopia, Iran, Saudi Arabia, UAE, and Indonesia.
• India proposed the New Development Bank (NDB) at the 2012 New Delhi summit, which has approved approximately $44 billion across 141 projects by mid-2026.
• The upcoming BRICS Pay system aims to link national payment rails like UPI, CIPS, SPFS, and Pix for trade settlement in national currencies.

Detailed Insights:

• BRICS originated in 2006 as an economic grouping of Brazil, Russia, India, and China, based on a Goldman Sachs projection.
• It has evolved into a geopolitical entity, increasingly representing the voice of the Global South, advocating for reform of international financial institutions and the United Nations.
• India's engagement in BRICS aligns with its strategy of multi-alignment, allowing strategic autonomy in global affairs.
• Significant divergences exist within BRICS, with China and Russia viewing it as a counterweight to Western dominance, while India and Brazil prioritize economic and reform-oriented goals.
• The expansion has introduced geopolitical contradictions, as seen in the failure to agree on a joint declaration at the May 2026 Foreign Ministers’ meeting due to conflict between Iran and the UAE.
• BRICS members are increasingly adopting bilateral settlement of trade in national currencies, such as the rupee-dirham and rupee-rupiah systems, and Special Rupee Vostro Accounts.
• India's priorities for the 2026 summit include fostering consensus amidst global conflicts, strengthening the NDB, and promoting practical cooperation in areas like digital public infrastructure and climate finance.

Key Concepts Involved:

• Purchasing Power Parity (PPP): A method of comparing economic productivity and standards of living between countries by adjusting for differences in local prices.
• Global South: A term used to refer to countries in Asia, Africa, and Latin America, often characterized by developing economies and shared historical experiences.
• Multi-alignment: A foreign policy approach where a nation engages with multiple global powers and blocs without committing to exclusive alliances.
• De-dollarization: The process of reducing the reliance on the United States dollar as the primary currency for international trade and financial transactions.