An enormous task ahead
On January 1 India took over the BRICS Chair. On January 13 External Affairs Minister S Jaishankar launched the logo, theme and website of India’s Chairship. Speaking on the occasion Jaishankar noted “In 2026, BRICS will complete twenty years since its inception, during which it has steadily evolved into a significant platform for cooperation among emerging markets and developing economies”. It is true that the group of BRIC countries–Brazil, India, Russia and China–was originally conceived as a group of emerging economies. However, over the past two decades and more, the countries comprising the group have gone beyond the status of ‘emerging economies’.
In the 1990s Russian Foreign Minister Primakov mooted the idea that the interests of ‘emerging’ economies coincided. This was also the decade when the Cold War had ended and countries such as India and Russia had embarked on their economic liberalisation. As the century turned, the realization that these emerging economies offered markets was picked up by US financial companies. One of their executives thought in 2001 of a group consisting of Brazil, Russia, India and China. At that stage the four countries could be considered emerging. This is because their GDP’s did not put them in the first rank of economies.
In 2001, China was sixth in the world behind the US, Japan, Germany, Britain and France; Brazil was at number ten and India at number thirteen. Ten years later China had become the second largest economy in the world. The first decade of the century also witnessed the greatest turbulence in the global economy after the Great Depression which began in 1929 and continued for almost ten years. This turbulence in the financial markets in 2008 led to a recession. It brought th3e four countries together. The first BRIC summit was held in Russia in 2009. A year later South Africa joined the group making it BRICS.
The path of the BRICS countries since the first summit has not been easy but they have made progress, although, at different rates. India has become the world’s fourth largest economy and is looked upon as a stable country and a major power. It has an enormous task ahead to reduce and then eliminate poverty but it is working to improve the lot of its people. Russia, Brazil and South Africa despite hiccups have also done fine. The real story of these times, though, is the rise of China.
China continues to be the second largest economy of the world. Its GDP in 2024 was around US $ 19 trillion as compared to America’s US $ 24 trillion. More importantly, its hard power has grown. The recently released National Defence Strategy by the US Department of War noted “By any measure, China is already the second most powerful country in the world– behind only the United States– and the most powerful state relative to us since the 19th century. And, while China faces very significant internal economic, demographic and societal challenges, the fact is that its power is growing”. This is a sobering assessment for all countries, including India. This country’s BRICS’ challenge is therefore to ensure that the group which now includes, in addition to the founding four and South Africa, Egypt, Ethiopia, United Arab Emirates, Indonesia and Iran as members, does not come to be dominated by China.
India has to meet its BRICS’ challenge in the world in churn because of the US weakening the world order which itself had established and the enormous change taking place in science and technology. The world is in the midst of the fourth industrial revolution with rapid advances taking place in Artificial Intelligence, Robotics and the Internet of Things. Jaishankar showed a keen awareness that India had assumed the Chairship of the group at a time of great change. He said “The current global environment presents complex and interlinked challenges. Geopolitical uncertainties, complicated economic landscapes, climate-related risks, technological changes, and persistent development gaps continue to affect countries across regions. In this context, BRICS remains an important forum that encourages dialogue and cooperation, and practical responses, taking into account national priorities and different stages of development”.
Jaishankar indicated India’s priorities in these words “ the four broad priorities of India’s Chairship - Resilience, Innovation, Cooperation, and Sustainability – they will provide a coherent and balanced framework across the three foundational pillars of BRICS: political and security, economic and financial, cultural and people-to-people exchanges”. All these themes are fine but the real priority will have to be to ensure that BRICS remains a forum which is not dominated by China. This will require deft diplomacy in the coming year.
An immediate issue that India will need to assist BRICS to navigate is the issue of the international reserve currency. The US is determined to maintain the Dollar as the world’s reserve currency which has greatly contributed to US global economic influence. The BRICS countries have looked at creating their own pool of currency for trade purposes. Trump has seen this as a hostile act. He had opposed such a move after his election in November 2024 and also after assuming office in January last year. The Dollar lost value last year and Trump’s seemingly erratic actions has led many countries to hedge by buying gold. While looking at its economic and strategic interest India will have to create a BRICS consensus on the issue of reserve currency.
Another matter India will have to handle carefully in the BRICS context relates to Iran which continues to be in US cross hairs and has witnessed great domestic unrest.
