BRICS, a significant plurilateral grouping of emerging and developing economies, is undergoing an important transition. This began on the road to the Johannesburg Summit (2023) and progressed well at the Kazan Summit (2024). If the process of transition can be consolidated at the forthcoming Rio Summit, scheduled for 6–7 July, it may be completed by the time India, as the next Chair, is ready to host the summit in 2026.
What has triggered the transition, and how has it been shaping up so far?
Established as BRIC, comprising Brazil, Russia, India, and China in 2006, it evolved into BRICS with the addition of South Africa in December 2010. The following decade witnessed regular meetings and summits with a focus on the grouping’s three-pillar agenda of cooperation in political and security domains, trade and finance, and people-to-people connect. Much was achieved, including the launch of the New Development Bank (NDB) in 2015. However, it later entered a phase of stagnation, with the grouping having little to show for the reform of global governance. Paradoxically, however, its membership became a much sought-after privilege. BRICS took note and responded creatively.
Between the two summits in Johannesburg and Kazan, and thereafter, the BRICS admitted six new members: Egypt, Ethiopia, the UAE, Saudi Arabia, Iran, and Indonesia. In addition, it created a new category – “partner country” – and opened its doors to ten states as partners. They are: Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan, and Vietnam.
The key challenge at the Rio Summit is twofold: one, to ‘socialize’ or integrate new members and partners properly into the architecture and philosophy of BRICS, respecting ‘the agreed criteria’, and, two, to decide on applications of yet other countries desiring to seek membership or partnership. Brazilian officials have indicated that the Chair is not enthusiastic about further expansion, stressing that if there are any pressing requests, they will be decided on ‘a case-to-case basis.’
The growing influence of BRICS is best seen in its expanding footprint in global affairs. It now accounts for 39% of the worldwide GDP in PPP terms (compared to 20% in 2003), 26% of international trade (compared to 18% in 2003), 49.5% of the world’s population, and 38.3% of the world’s territory. Intra-BRICS trade has increased from $17 billion in 2000 to $334 billion in 2020. The impact of the entry of energy-rich countries is significant: BRICS is now responsible for 44% of global oil production, 38% of natural gas production, and 78% of mineral coal production. Nearly 72% of the reserves of rare earth minerals are found in BRICS member countries.
Hence, if this grouping functions on the basis of solid unity, it can wield enormous influence. Yet, geopolitics comes in the way.
The latest geopolitical factor relates to the U.S. president’s utter sensitivity towards BRICS. Since his inauguration, President Donald Trump has made it clear that any move threatening the dominant position of the U.S. dollar in the global market would attract “100 percent penal tariffs” on BRICS’ exports to the U.S. market. Later, he declared that BRICS was “dead”. The announcement of BRICS’ demise appears to be premature. The plain fact is that a significant portion of Western media has wrongly convinced itself that the grouping is ready to launch a new BRICS currency as a possible substitute for the U.S. dollar.
Even if one or two member countries are so inclined, others are more pragmatic. They are striving for a set of alternative payment mechanisms. India, for example, prefers to use national currencies for bilateral trade transactions. This is a perfectly legitimate way to handle international trade, even if it has the effect of reducing the use of the U.S. dollar. At the Rio Summit, moderates are likely to prevail, ensuring that acceptable alternatives are finalised, without jeopardising the BRICS’ ties with the U.S. and other G7 economies. How this is secured will require close monitoring.
Another issue to keep an eye on is the further evolution of the New Development Bank (NDB), a singular success of BRICS. The NDB is a multilateral development bank established to mobilise resources for financing infrastructure and sustainable development projects in developing countries. It began with the authorised capital of $100 billion and the paid-in capital of $52.7 billion. To date, the bank is involved in 96 approved projects, totalling $32.8 billion in financing.
The five founding members of BRICS, back the bank. It has three other members: Bangladesh, the UAE, and Egypt, with Uruguay and Algeria in the process of joining. It is expected that the remaining new members of BRICS will also join the bank. NDB must expand its capital base. Saudi Arabia could be of great help in this context, but its membership of BRICS is yet to be fully operationalised. Thus, this too is a facet of the ongoing transition.
The Indian perspective should also be taken into consideration here. New Delhi views BRICS as a non-Western, and not an anti-Western, grouping. It shall try to keep it so. Further, the cause of reform of multilateral institutions will continue to be pursued. Following Pahalgam and ‘Operation Sindoor’, it will be India’s enhanced endeavour to ensure that BRICS positions itself firmly against international terrorism, renew its resolve to combat cross-border terrorism, and refrain from equating the victim of terrorism (such as India) with its perpetrator (such as Pakistan). Above all, India is keen to strengthen economic cooperation and expansion, as well as People-to-People connectivity among its members and partners.
Finally, what Brazil has been doing as the Chair needs to be looked at. Under its motto ‘Strengthening Global South Cooperation for More Inclusive and Sustainable Governance’, the Brazilian government has worked to achieve six specific goals. They are: encourage projects to promote global health cooperation; push reform of financial markets, local currencies and payment instruments; adopt a Climate Leadership Agenda; promote inclusive and responsible international governance of Artificial Intelligence; promote global reform of the multilateral system and security architecture to deal with conflicts; and finally improve the structure and cohesion of the BRICS.
Two more points need to be mentioned in the end. First, Iran, a new member, faced serious military hostilities from Israel and the U.S. in the build-up to the Rio Summit. A joint statement was issued on 24 June regarding the security situation in the Middle East. But Iran may expect more support at the summit. Second, reports indicate that President Xi Jinping may not attend the summit. Instead, China will be represented by Premier Li Qiang. The Russian president is also unlikely to attend. Hence, the bulk of responsibility may fall on the shoulders of the leaders of Brazil, India, and South Africa to give a decisive direction to BRICS in the immediate future.
In short, the 17th summit is likely to provide adequate indications of the future trajectory of BRICS as a crucial geoeconomic and geopolitical forum in the world today.
Rajiv Bhatia is the Distinguished Fellow for Foreign Policy Studies, and a former ambassador.
This article was first published in Firstpost.