India’s substantial trade deficit within intra-BRICS trade, particularly concerning China, underscores the need for a comprehensive approach
Published Date – 11:59 PM, Wed – 13 September 23
India’s substantial trade deficit within intra-BRICS trade, particularly concerning China, underscores the need for a comprehensive approach
By Devendra Poola, Sagar Mekala, Tarun Naik
In a significant move, the BRICS alliance has embarked on its first expansion since the inclusion of South Africa in 2010. Currently representing nearly 40% of the world’s population, 33% of global GDP and 20% of world trade, the new BRICS, which welcomes Argentina, Egypt, Iran, Saudi Arabia, Ethiopia and the United Arab Emirates, not only amplifies these figures but also assumes a pivotal role in shaping the evolving global order of the 21st century.
Global Dynamics
This expansion transpires during a crucial juncture where the world is at a crossroads. As nations endeavour to rebuild in the aftermath of the pandemic, accompanied by intricate adjustments in global supply chains, the Russia-Ukraine conflict has introduced a fresh wave of geopolitical polarisation, manifesting through western sanctions on Russia.
Concurrently, the expansion gains further significance as the existing BRICS members have all committed to the Paris Climate Agreement, spotlighting the urgency of collaborative climate action. This development reignites discussions about the dominance of the developed west in global economic institutions and policy frameworks. Incepted in 2001, BRIC initially signalled a ‘gravity shift’ challenging the dominance of G7 and the IMF. The current expansion propels this narrative, providing an alternative platform for representation in international policy formulation for the ‘Global South.’ With 40 countries showing interest in joining BRICS, the collective strength gains momentum, signalling a promising trajectory for future global negotiations. The introduction of key oil suppliers — Iran, Saudi Arabia and the UAE — adds an essential energy security dimension to the BRICS consortium. China’s strategic intent takes centre stage in this expansion, driving the addition of new members.
China’s Intent
The strategic implications are evident as China aims to leverage this expansion to further its ambitious Belt and Road Initiative (BRI). However, this strategic move might potentially intensify tensions, especially with the United States, prompting discussions about the reconfiguration of global economic influence. The inclusion of Iran into BRICS holds ramifications for Russia’s positioning within the alliance, particularly against the backdrop of western sanctions. This intricate interplay adds an intriguing layer to the evolving dynamics.
India’s Perspective
As this debate unfolds, it becomes crucial to meticulously examine India’s perspective on the new expansion of BRICS and the potential takeaways it could derive from these developments. This exploration is paramount in comprehending India’s forthcoming stance within BRICS and its alignment with the alliance’s evolving goals.
The expansion of BRICS has garnered a favourable response from Prime Minister Narendra Modi, aligning seamlessly with India’s consistent stance on various global issues. India’s persistent call for reform within institutions like the IMF and the UN Security Council hinges on the principle of equitable representation and inclusion. The expansion of BRICS serves to reinforce this argument for fair participation across regions.
Moreover, this enlargement carries the added benefit of balancing China’s prominence within the alliance, thereby amplifying the collective voice of the Global South. Furthermore, the inclusion of Iran, Saudi Arabia and the UAE comes at a juncture where India’s engagements with these vital energy-security players are of strategic importance. Iran’s significance lies in its role as a gateway for India to access Central Asia via the Chabahar port and to develop the North-South Transportation corridor. Meanwhile, Saudi Arabia and the UAE have traditionally played pivotal roles in ensuring India’s energy security. India’s recent advancements in dialogue and trade with these nations, evident through agreements such as the Comprehensive Economic Partnership Agreement (CEPA) with the UAE, underscore the gravity of these partnerships. In addition to these key players, recent years have witnessed India forging new pathways through strategic agreements with Argentina, Ethiopia and Egypt, showcasing its resolve to broaden its diplomatic and economic horizons.
Trade Deficit
India’s substantial trade deficit within intra-BRICS trade, particularly concerning China, underscores the need for a comprehensive approach to address trade imbalances. Even among the new entrants, India faces trade deficits with Argentina, Saudi Arabia and the UAE. While immediate shifts away from oil dependency are challenging, it becomes imperative for India to envision a long-term strategy to bridge these gaps. Such efforts would not only enhance India’s standing within BRICS but also emphasise its commitment to climate change agreements and sustainable development.
The delicate balancing act India undertakes between western nations and the Russia-China alliance may become more intricate with Iran”s inclusion in BRICS. Notably, none of the BRICS members support western sanctions against Russia. In this complex landscape, India must carefully navigate its role to ensure harmonious relationships with both power blocs, thereby maximising benefits for its own interests.
Overall, the expansion of BRICS with the inclusion of six new members reverberates across the international arena, sparking debates and discussions that underscore the evolving dynamics of our time. The simultaneous welcome extended to Iran and Saudi Arabia, the potential challenge posed to the G7’s hegemony, and the intricate interplay between new power blocs all contribute to a complex geopolitical tapestry. As these developments unfold in the coming years, they are poised to set the tone for the 21st-century global order, highlighting the evolving influence and significance of the BRICS alliance in shaping international affairs.
