India has emerged as a major global economic power in recent decades. With a population of over 1.3 billion people, India is the world's largest democracy and is poised to become one of the top three economies in the world by 2050. A major factor accelerating India's rise is its involvement in the BRICS alliance – an association of major emerging economies that includes Brazil, Russia, India, China and South Africa. India's strategic partnerships through BRICS provide the country with greater geopolitical leverage and opportunities to increase trade and investment flows. This blog post will analyze how India’s leadership in BRICS is propelling its trajectory to superpower status in the 21st century.
Overview of BRICS
BRICS is an acronym for the powerful grouping of the world’s leading emerging economies – Brazil, Russia, India, China and South Africa. These five nations collectively represent over 3.6 billion people, about 40% of the world’s population. BRICS has emerged as a platform for cooperation between these major economies to reform global governance and shape the international agenda on key issues.
The genesis of BRICS can be traced back to 2001 when the term was coined by Goldman Sachs economist Jim O’Neill in a report on growth projections for major economies this century. The foreign ministers of the initial four BRIC countries held their first official meeting in 2006. South Africa joined in 2010, formally creating BRICS. Annual summits are held by the BRICS nations to discuss ways to strengthen cooperation. To date, there have been 14 BRICS summits. 15th BRICS summit is currently happening in South Africa. This summit is considered as an important one in the history of the world and could lay the foundations for a new global order.
BRICS nations have certain common features that provide the logic for their cooperation even though they have different political systems. Firstly, they share high economic growth rates and large populations which give them significant economic potential. Secondly, they hold substantial natural resources, especially minerals and energy resources. Thirdly, they generally advocate for a more democratic and polycentric world order. Through deeper coordination on political and economic matters, BRICS aims to create frameworks that better reflect the interests of developing countries.
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How BRICS Benefits India?
BRICS membership provides India with several competitive advantages to grow its economy and global influence:
1. Access to Alternative Funding Sources
A major initiative under BRICS has been the creation of alternative multilateral development banks. The New Development Bank (NDB) and Contingency Reserve Arrangement provide funding for BRICS countries without the strict policy conditions of Western-dominated institutions like the IMF and World Bank. The $100 billion NDB is headquartered in Shanghai and aims to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies. This allows India access to increased financing for its development needs.
2. Mechanism for Reform of Global Governance
BRICS provides India and other member nations a collective platform to push for reform of global political and economic governance frameworks. Institutions like the UN Security Council, World Bank and IMF are seen as reflecting an outdated power structure. The rise of India, Brazil and South Africa means the concentration of influence in the hands of just the US and European powers is no longer fair. BRICS gives India the ability to coordinate with major emerging markets to advocate for greater representation of developing countries in decision-making bodies to match the realities of the 21st century.
3. Strengthening Cooperation with China and Russia
Through BRICS, India has been able to strengthen strategic relationships with other members like Russia and China. These are critical partnerships from an economic and geopolitical standpoint. Russia has become one of India’s top arms suppliers while China is now India’s largest trading partner. Cooperation on security and economic matters through BRICS helps to maintain stable relations between these giant neighbors. This allows India to focus on its domestic growth rather than border tensions or conflicts.
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4. Platform for Indian Leadership in the Developing World
BRICS membership gives India an opportunity to exert intellectual leadership and champion the interests of less developed nations. With a young population and fast-growing consumer market, India is a model for developing countries seeking rapid inclusive growth. Its democratic values also make India a credible voice for the developing world. India can use BRICS as a launching pad to increase its strategic investments and assistance for other emerging economies, especially in South Asia and Africa. This boosts India's global stature.
Key BRICS Achievements
While BRICS is still an evolving project, India and other members have already made significant achievements through the bloc:
Alternative Financial Institutions: As mentioned earlier, the NDB and Contingency Reserve Arrangement give BRICS autonomy in development funding without relying on Western-led structures. The NDB has mobilized over $80 billion with a focus on renewable energy, transport infrastructure, irrigation, and enhanced coordination between members.
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Technology and Innovation: BRICS has developed a cooperation framework to collaborate on technology, innovation and the digital economy. This includes an innovation BRICS Network University, BRICS Institution of Future Networks and an Agricultural Research Center. India stands to gain knowledge and skills in key future industries.
Energy Security: Steps have been taken to increase cooperation on ensuring energy security. State-run companies from India and China have made joint investments worth billions in Russian oil and gas assets. There are also plans for integrating power systems and hydropower projects between BRICS countries. This boosts India's energy access.
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People-to-People Exchanges: BRICS facilitates academic, cultural, youth, media and civil society exchanges. Programs like the BRICS Film Festival, BRICS Friendship Cities initiative, BRICS Sports Council and BRICS Youth Summit increase familiarity between the nations at the citizen level. This builds soft power and understanding.
India’s Leadership Within BRICS
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While all BRICS members see themselves as equals, India has emerged as a prominent leader within the bloc. Indian Prime Minister Narendra Modi has proactively pushed for increasing cohesion between BRICS members. India hosted the successful 2016 BRICS Summit in Goa seen as marking a new phase for the bloc.
With the world’s largest population, one of the largest standing militaries, and fastest growing trillion-dollar economy, India is well-poised to take a commanding role. India will account for the dominant share of BRICS growth in coming years. The IMF projects India’s economy will expand 7.4% in 2022, nearly double the rate of other members.
At the same time, India maintains strategic autonomy. It has an independent foreign policy vision and does not participate in any overt anti-Western posturing like China and Russia. This balance makes India a moderate leader within BRICS compared to competitors like China. India also pioneered the new 'BRICS Plus' approach which allows expansion to include other like-minded emerging economies in Africa and Asia. This demonstrates India's leadership in shaping BRICS to protect the interests of the Global South.
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BRICS as a Force for a More Equitable Global Order
The rise of BRICS could benefit the world in several ways. By providing an alternative pole of political and economic power, BRICS helps create a more balanced, multipolar global order. The bloc gives a greater voice to emerging economies in international affairs and global governance. BRICS also facilitates greater South-South cooperation. The increased trade and investment flows between BRICS members and other developing countries can accelerate growth and development. BRICS helps mobilize new funding sources for infrastructure and sustainable development projects in Asia, Africa and Latin America. Overall, the emergence of BRICS provides more diversity and opportunities for collaboration in an increasingly interconnected world.
BRICS as an Engine for Development and Empowerment in Africa. How BRICS will be Beneficial For Africa?
The rise of BRICS offers tangible benefits for the African continent. Firstly, BRICS serves as an alternative source of investment and development assistance without the strict conditions of Western sources. Members like China and India are already among the largest trade and investment partners for many African nations. The New Development Bank facilitates increased BRICS financing for infrastructure in Africa. Secondly, South Africa's membership makes BRICS a platform to advocate for African interests and greater representation in global governance. Thirdly, people-to-people exchanges like the BRICS Africa Young Leaders program enhance skills development and technical capacities. Overall, the emergence of BRICS provides African countries greater leverage, resources and opportunities to support their growth and development objectives. Stronger ties with BRICS can boost Africa's participation in the global economy and reduce dependence on the West.
BRICS as a Catalyst for Reduced Dependence and Enhanced Strategic Autonomy in Latin America. How BRICS will be beneficial for Latin America?
The rise of BRICS offers important benefits for Latin American countries as well. Firstly, Brazil's membership in BRICS gives the region a voice to project its interests and priorities more effectively in global affairs. Secondly, the bloc promotes greater South-South cooperation. Latin American countries can leverage their partnerships with BRICS members to gain increased trade, investment and technical assistance. China and India in particular represent massive consumer markets and sources of capital for commodities and infrastructure. Thirdly, the New Development Bank provides an alternative source of development financing focused on sustainable projects. Loans from the NDB come without the austerity conditions of IMF or World Bank funds. Overall, deeper ties with BRICS enhance Latin America's strategic autonomy and provide more diverse opportunities to support national development goals. Stronger relations with BRICS allow Latin American countries to rebalance ties away from traditional reliance on the US and Europe.
Potential Impact of a BRICS Currency on the Global Financial System
The launch of a common BRICS currency could significantly reshape the global financial system in several ways. Firstly, it would reduce the dominance of the US dollar as the premier global reserve currency and dilute its importance in international trade and finance. Secondly, a BRICS currency could lead to greater use of member countries' national currencies in bilateral trade and investment flows between BRICS and other emerging economies. This may accelerate the de-dollarization trend. Thirdly, a BRICS currency could potentially rival the IMF's Special Drawing Rights, providing an alternative reserve asset for central banks globally. This could make the IMF and World Bank less influential in the long run. Overall, a BRICS currency could be a milestone towards a more multipolar monetary order by challenging the supremacy of Western currencies that underpin the current financial system. However, the differences between the BRICS members also suggest launching a single currency may face considerable hurdles.
Potential for a BRICS Currency to Aid Sanctioned Countries
A potential BRICS currency could provide significant relief for countries hit with Western sanctions. Firstly, it would give sanctioned countries an alternative payment system to continue international trade and financial transactions, bypassing instruments like SWIFT that are dominated by the US and EU. Secondly, the currency reserves could aid sanctioned countries facing frozen assets and restrictions on dollar/euro denominated transactions. Thirdly, the new currency could be used by sanctioned countries when importing essentials like food, medicines and energy from BRICS members. This enhances strategic autonomy. However, the effectiveness of a BRICS currency to overcome sanctions depends greatly on the bloc's ability to establish extensive trade and investment flows as well as enforcement mechanisms. But it does provide sanctioned countries more options. Provided BRICS itself maintains cohesion, a new currency could be a lifeline for economies targeted by Western sanctions.
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Challenges and Limitations of BRICS
However, India must be cautious in overestimating the competitive advantages of BRICS. There are certain limitations:
BRICS is still more symbolic than substantive in creating tangible economic and governance structures to displace the Western-led order. Initiatives like NDB have only mobilized a small fraction of funding compared to the World Bank or IMF.
Competition and mistrust between members like India and China could block deeper cooperation. There are ongoing border tensions and mismatches in strategic and economic priorities.
BRICS has failed to develop a unified political or security architecture. Members have diverged significantly on issues like the Ukraine crisis, Syrian civil war, and South China Sea disputes based on their own national interests.
Western powers like the US and EU still represent over 50% of the global economy and military spending. They continue to dominate institutions like the UN Security Council, NATO, World Bank and IMF. Displacing their influence will be very difficult.
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India's Emergence as a Pivotal Power if BRICS Redefines Global Order
If BRICS overtakes the economic dominance of the G7 and G20, India is likely to emerge as a central pillar of the new world order. This is due to several factors. Firstly, India will be the most populous country among the major economies, giving it demographic power. Secondly, India maintains strategic autonomy and partnerships with all the major powers, making it a balancer. Thirdly, India champions global issues like climate change, sustainable development and energy access critical for the Global South. Fourthly, India's leadership in IT services, digital economy and knowledge sectors will underpin the 21st century world. Finally, India's culture of pluralism and democracy makes it a morally credible leader for the developing world. With deft diplomacy and expanding national power, India is well-positioned to become the Centre of gravity if BRICS displaces Western dominance of the global system.
China-India Rivalry: An Enduring Challenge for BRICS Unity
The unresolved border issues and strategic rivalry between China and India could hinder deeper cooperation within BRICS. The two countries engaged in a tense military standoff along their Himalayan border in 2017. China's growing ties with Pakistan also remain a concern for India. Their competition for influence in South Asia and the Indian Ocean region could stymie consensus on security initiatives under BRICS. Additionally, the large trade deficit India runs with China has sparked Indian efforts to limit Chinese imports. The mismatch in priorities for reforming global governance between democratic India and authoritarian China also persists. While shared interests have allowed pragmatic engagement, lingering distrust due to the China-India tensions could reinforce divisions within BRICS and prevent the bloc from achieving its full potential. However, continued diplomacy to manage their differences and expand common ground will be important.
Managing Expectations: Balancing BRICS Ties with India's Strategic Autonomy
However, India also needs realistic expectations on the limitations of BRICS. Deeper ties with fellow members must be balanced with India's own strategic autonomy on foreign policy matters. But overall, BRICS remains among India's most valuable multilateral relationships to uplift its global standing. Leveraging BRICS effectively will be instrumental in unlocking India's potential to become a true superpower.
BRICS Provides a huge push for India’s Superpower Ambitions
In summary, India's involvement in BRICS represents a major accelerator of its rise as a global superpower in this century. BRICS offers India strategic partnerships and access to trade, investment, technology and resources to sustain its economic expansion. Working collectively with other emerging economies gives India greater bargaining power to reform global governance in its favor. It also boosts India's prestige as a dynamic leader of the developing world.
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NOTE: This article does not intend to malign or disrespect any person on gender, orientation, color, profession, or nationality. This article does not intend to cause fear or anxiety to its readers. Any personal resemblances are purely coincidental. All pictures and GIFs shown are for illustration purpose only. This article does not intend to dissuade or advice any investors.
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