BRICS Grouping — Expansion, NDB, Dedollarisation & UPSC Notes (UPSC International Relations)

BRICS has moved from a catchy 2001 acronym coined by Goldman Sachs economist Jim O'Neill to a ten-member geopolitical bloc that now speaks for roughly 45% of global population and over 35% of world GDP in PPP terms. For UPSC GS-II, BRICS is central to questions on Global South diplomacy, multilateral reform and India's strategic autonomy.

Origin and evolution

• 2006: First BRIC foreign ministers' meeting on the sidelines of UNGA.
• 2009 Yekaterinburg: First BRIC leaders' summit in Russia.
• 2010: South Africa joins; the grouping becomes BRICS.
• 2014: Sixth summit, Fortaleza, launches the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) — a US$100 billion liquidity pool.
• Aug 2023, Johannesburg (15th summit): Invitations extended to six countries.
• Jan 2024: Egypt, Iran, UAE, Saudi Arabia and Ethiopia formally join. Argentina declined. Saudi Arabia's status remained ambiguous initially.
• Oct 2024, Kazan (16th summit): BRICS+ consolidation; Russia chaired with 30+ partner-country invitees.

Founding principles

• Solidarity, openness, pragmatism, non-bloc orientation, neutrality towards third parties.
• Consensus-based decision-making; no secretariat.
• Rotating presidency.

Core institutions

New Development Bank (NDB)

• Headquartered in Shanghai, established 2014, operational 2015.
• Initial capital: US$50 billion authorised; US$100 billion envisaged.
• Equal voting shares for the five original founders.
• Lends in local currencies; approved over US$40 billion in loans by 2024.
• New members (UAE, Egypt, Bangladesh, Uruguay) admitted since 2021.
• First woman and first Brazilian president — Dilma Rousseff — since March 2023.

Contingent Reserve Arrangement (CRA)

• Liquidity support for members facing short-term balance-of-payments pressure.
• US$100 billion committed (China US$41 bn, Brazil/India/Russia US$18 bn each, South Africa US$5 bn).

Other initiatives

• BRICS Pay / BRICS Bridge — cross-border payments infrastructure (in development).
• BRICS Business Council, BRICS Women's Business Alliance, BRICS Academic Forum.
• BRICS Joint Statistical Publication, BRICS Exchanges Alliance.

BRICS+ expansion (2024)

Argentina's new Milei government declined the invitation in December 2023.

Impact

• Population: From ~40% to ~45% of world.
• Oil: BRICS+ includes Russia, Iran, UAE and (nominally) Saudi Arabia — over 40% of global oil production.
• Strait of Hormuz, Bab-el-Mandeb, Suez Canal, Malacca: All four critical chokepoints now bracket BRICS+ members.
• Global South legitimacy strengthens against the G7-dominated club of advanced economies.

Kazan Summit (Oct 2024) — BRICS 2.0

The 16th summit in Kazan under Russia's chairmanship focused on:

• Local-currency settlement and a BRICS-led payment system (BRICS Clear).
• BRICS Grain Exchange and food security coordination.
• A Kazan Declaration criticising unilateral sanctions and calling for UN and IMF reforms.
• Admission of a "BRICS partners" category — Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan and Vietnam.
• India's PM Modi used the summit to hold a bilateral with Chinese President Xi Jinping — the first in five years since the Galwan clash.

Significance of BRICS

For the Global South

• Democratising global governance — pushback against Western-dominated IMF and World Bank.
• Developmental finance without the Washington Consensus conditionalities.
• Climate finance and fair energy transition demands amplified.

For individual members

• China — anchors Global South leadership; counters US containment.
• Russia — survives Western sanctions with BRICS-based payments.
• Brazil — Lula has made BRICS central to Global South diplomacy; hosted the 17th summit (2025).
• India — balances membership in Quad, G20 and BRICS as a pillar of multi-alignment.
• South Africa, Egypt, Ethiopia — voice for Africa.
• Gulf members (UAE, Saudi, Iran) — hedging between US, China and Russia.

Significance for India

1. Multi-alignment — simultaneous presence in Quad and BRICS secures policy space.
2. Strategic partnerships

• Saudi Arabia — 4th largest trade partner; 18% of India's oil.
• UAE — CEPA partner; INR-AED local-currency settlement agreed in 2023.
• Iran — 10-year Chabahar port deal (May 2024); INSTC anchor.
• Egypt — 5th largest trading partner in Africa; PM Modi's 2023 visit restored high-level ties.
• Ethiopia — Line of Credit recipient; defence cooperation in negotiation.

1. UNSC reform — BRICS calls for Global South representation; though China remains opposed to India's P5 seat.
2. Vishwa Bandhu positioning — India as bridge between Global South and the West.

Concerns

China-dominance risk

• China's economy is ~3× the combined size of the other four original BRICS.
• Belt and Road debt dependencies could steer NDB lending priorities.
• Assertive stance on South China Sea could overshadow collective positions.

Political heterogeneity

• Iran and China's anti-Western tilt vs India's non-alignment.
• Ethiopia's internal conflicts.
• Saudi-Iran historical rivalry (though partly defused by China-brokered 2023 rapprochement).

India-China tensions

• The Galwan legacy and unresolved LAC issues complicate BRICS cohesion.
• Kazan summit bilateral (Modi-Xi) signalled thaw but full normalisation remains work in progress.

De-dollarisation

• BRICS has spoken extensively about it but achieved modestly — local-currency trade is growing but the dollar retains ~58% of global reserves. BRICS common currency is not feasible in the near term given divergent macro profiles.

BRICS vs G7 vs G20

Latest developments (2024-26)

• Jan 2024: Five new members officially join; BRICS+ is born.
• March 2024: NDB opens regional office in Cairo.
• Oct 2024: Kazan summit, BRICS partners category, Modi-Xi bilateral.
• Nov 2024: G20 Rio — BRICS positions on hunger, taxation, climate shaped the agenda.
• Jan 2025: Trump 2.0 threatens 100% tariffs on BRICS members that reduce dollar usage. India and Russia publicly respond with continued commitment to local-currency trade.
• Feb 2025: India and France co-chair AI Summit Paris; BRICS members coordinate positions on AI governance.
• Israel-Hamas ceasefire (Jan 2025) and Red Sea crisis: BRICS+ includes both sides (Iran, UAE, Saudi) — early tests of consensus diplomacy.
• Russia-Ukraine war: BRICS peace track moves slowly; India's July 2024 Putin-Modi meeting and August 2024 Modi-Zelenskyy visit positioned India as interlocutor.
• 2025 Rio Summit (17th): Brazil's Lula uses BRICS to push climate and AI governance from the Global South side.

Way forward

• Deepen local-currency trade incrementally rather than announcing a common currency.
• Reform NDB governance to limit China's weight and expand co-financing with AIIB, ADB, World Bank.
• Institutionalise secretariat-light coordination to prevent summit-only diplomacy.
• Manage expansion carefully — BRICS partners model is pragmatic.
• India-China management is the single biggest determinant of BRICS coherence.

UPSC Relevance

GS-II: "Bilateral, regional and global groupings involving India." Essay: "The world is not multipolar yet but no longer unipolar."

Probable questions

• Examine the significance of BRICS expansion for India's foreign policy and Global South leadership. (15 marks)
• Is BRICS a credible alternative to the Bretton Woods institutions? Discuss. (15 marks)
• How does India reconcile its membership of BRICS and the Quad? (10 marks)

Prelims trigger words — BRICS+, NDB, CRA, BRICS Pay, Kazan Summit, Vishwa Bandhu, Chabahar port, INSTC, Johannesburg Summit 2023, BRICS partners category.

BRICS works not because its members agree, but because they find it useful to keep talking. For India, BRICS is insurance — a platform that preserves optionality in a world where no single order holds sway.