BRICS Seeks 'Mutually Reinforcing Policy Levers' To Boost Intra-Bloc Trade, Pg15

Key Highlights:

• The New Delhi Declaration outlined that BRICS countries will pursue "mutually reinforcing policy levers" to enhance intra-bloc trade and ensure resilient Global Value Chains.
• In 2025, intra-BRICS trade constituted only 4.1% of global exports, despite the bloc accounting for 21.6% of total world exports.
• China significantly dominates intra-BRICS trade, leading to a "China-centred hub-and-spoke pattern."
• India recorded the largest trade deficit among BRICS members, amounting to $236 billion in 2025.
• The New Delhi Declaration endorsed studying an Invoice Discounting Mechanism to boost the participation of Micro, Small, and Medium Enterprises (MSMEs) in international trade.
• These initiatives stem from discussions held during the 16th BRICS Trade Ministers' Meeting in Jaipur in August.

Detailed Insights:

• The policy levers identified include strengthening backward and forward Global Value Chain linkages and promoting regional integration.
• Efforts will also focus on economic diversification beyond primary commodities, investment in physical and digital infrastructure, and regulatory frameworks.
• Upgrading workforce skills is another key area identified to foster greater trade within the BRICS grouping.
• Experts suggest that better market access, lower trade barriers, improved logistics, and local-currency settlement are crucial for growth.
• The Invoice Discounting Mechanism aims to provide liquidity to MSMEs by allowing them to obtain funds against their outstanding invoices.
• BRICS is an intergovernmental organization comprising eleven major emerging economies: Brazil, Russia, India, China, South Africa, Iran, Saudi Arabia, Egypt, Ethiopia, United Arab Emirates, and Indonesia.
• The New Delhi Declaration also called for reforms of multilateral institutions, including a structural update of the United Nations Security Council.

Key Concepts Involved:

• BRICS: An intergovernmental organization of major emerging economies established to foster greater economic and geopolitical integration among its member states.
• New Delhi Declaration: A consensus document adopted at the BRICS summit, outlining collective positions on trade, global governance, and institutional reforms.
• Invoice Discounting Mechanism: A financial tool enabling businesses, particularly MSMEs, to access immediate funds by selling their unpaid invoices to a financier at a discount.
• Global Value Chains (GVCs): The complete sequence of activities, from conception to end-use, required to bring a product or service to market, with stages often dispersed across multiple countries.
• Micro, Small, and Medium Enterprises (MSMEs): Businesses categorized by their size and turnover, recognized for their significant contribution to employment and economic growth.
• Local-currency settlement: The practice of conducting international trade transactions using the national currencies of the trading partners, reducing reliance on a dominant international currency.