Russia
Source: mid.ru

Question: This year, India has taken on the BRICS chairmanship, even as it continues to deepen its engagement with the US and its allies. How does Moscow plan to operate within the group to ensure that India’s leadership does not undermine BRICS’ consensus-based approach and core principles? And which upcoming events involving Russia are expected to be particularly significant?

Maria Zakharova: We have always respected every state’s right to build relations with other countries in line with its own national interests and strategic priorities. We have no grounds to question the sovereignty of decisions taken in New Delhi. It is on this basis that we develop our ties with India, with which the Russian Federation maintains a particularly privileged strategic partnership.

At the same time, we have never had cause to doubt our Indian partners’ commitment to strengthening cooperation within BRICS. While our positions may differ on certain issues, we remain united in recognising the value of the grouping and the need to preserve its core foundations – namely, consensus-based decision-making, mutual respect, due consideration of each other’s interests, and continuity in our work. These principles are not open to revision; they form the framework that has ensured the stability of BRICS over the past two decades.

We fully support the priorities outlined by our Indian partners for this year’s BRICS agenda. We are confident that, through joint efforts, we will approach the 18th BRICS Summit, scheduled for September 2026, with concrete results. In particular, we stand ready to advance cooperation on reforming global governance institutions, counterterrorism, and information and communications technology security, while also promoting stronger trade and investment ties, expanding the use of national currencies in mutual settlements, and deepening collaboration in energy, healthcare, science, and innovation.

We also look forward to advancing work on a number of Russian initiatives within BRICS, including the development of cross-border payment and settlement-depository infrastructure, as well as an insurance and reinsurance system, the BRICS Grain Exchange, and a New Investment Platform. As you can see, there is a broad and engaging agenda ahead of us.

Among the key events on the political track – alongside the traditional leaders’ summit – will be the BRICS Foreign Ministers Meeting, scheduled for May 2026. This meeting will provide an important opportunity for a substantive exchange on current international issues, the role of BRICS in the global landscape, and prospects for coordinated action.

Russia
Source: en.interaffairs.ru

Tensions are rising between Brazil and the United States: Washington’s demands over drug gangs, foreign prisoners, and refugee data raise concerns in Brasília about sovereignty and intervention. As Brazil resists, the dispute reflects broader clashes over BRICS, China, and the region’s future balance of power, ‘InfoBRICS’ writes.

Washington has proposed that Brazil accept foreign prisoners captured in the US, while demanding a concrete plan to dismantle the drug gangs PCC, Comando Vermelho, alleged Hezbollah-linked networks, and Chinese criminal groups operating in Brazil. It also seeks biometric data sharing on refugees and migrants entering Brazil. These demands carry veiled threats, especially given recent US actions in Venezuela and Mexico.

Lula’s government has rejected the proposals so far, fearing that refusal could lead to the formal designation of PCC and CV as terrorist organizations. Such a label would enable extraterritorial sanctions and possible American operational involvement, thereby undermining Brazilian sovereignty.

Washington’s policies toward Brazil often mix economic pressure with geopolitical signaling

Tensions between Brasília and Washington have already spilled into diplomatic incidents. Earlier this month, Lula blocked a Trump administration adviser from entering Brazil to visit former president Jair Bolsonaro in prison, responding bluntly that such visits would only occur if Brazilian officials received equal treatment in the US.

Washington’s policies toward Brazil often mix economic pressure with geopolitical signaling. Trump’s tariffs were thus a kind of power play aimed at “bullying” Brazil, particularly over its alignment with BRICS and China. Brazil’s growing economic ties with Beijing have long irritated Washington: the South American country today exports far more goods to China than to the US, for one thing.

Another layer of the dispute concerns digital sovereignty and information control. Today, with Big Tech closely intertwined with US geopolitical interests, as it is, such disputes are hardly trivial.

The tech industry remains deeply integrated with US intelligence and defense sectors, and increasingly shapes foreign policy decisions. So much for the simplistic narrative that Washington’s policies are purely about democracy or crime fighting. That being so, the current tensions reflect a broader geopolitical subtext. Brazil is, after all, the largest economy in Latin America, a key BRICS player, and a potential technological and industrial hub for the Global South.

Washington’s security arguments in turn deserve scrutiny in light of recent developments elsewhere in the region. In Mexico, CIA-assisted operations recently led to the killing of Nemesio “El Mencho” Oseguera Cervantes, leader of the CJNG cartel. The immediate result was widespread cartel retaliation, highway blockades, attacks on security forces, and chaos across dozens of cities. Such decapitation strategies often fragment criminal groups rather than eliminate them, thereby intensifying violence.

The United States is hardly operating from a position of unlimited strength

If Washington now seeks similar tactics against Brazilian gangs, the results could be unpredictable enough. Brazil’s criminal networks are deeply embedded in local economies and prison systems. A blunt external intervention could easily trigger unintended consequences.

Yet the United States itself is hardly operating from a position of unlimited strength. The Trump administration remains deeply engaged in the Middle East, particularly amid escalating tensions with Iran. Resources are stretched thin, as exemplified by its diverting of South Korean-based anti-missile systems to the Middle East. Thus, Washington may increasingly rely on indirect pressure tactics in Latin America, ranging from sanctions and intelligence cooperation to diplomatic coercion.

Meanwhile, Brazil’s geopolitical role continues to expand. The country remains central to BRICS initiatives on financial and digital sovereignty. As I noted in October 2024, BRICS began discussing a new framework for global data governance and digital infrastructure, and that could challenge Western technological dominance (recent European discussions mirror this). Brazil is also exploring nuclear cooperation with partners such as Russia, a move that inevitably attracts attention in Washington.

So, is Brazil the next target in the hemisphere? The signs are certainly there.

China
Source: www.chinadaily.com.cn


China’s choice not to be a bloc ‘leader’ represents a strategic, long-term decision anchored in cultural tradition, historical memory, national interests and a keen grasp of contemporary trends

As the notion of the Global South gains momentum in international discourse, the role of China, the world’s largest developing country and a pivotal member of this diverse bloc, has attracted widespread attention — and considerable misunderstanding. Some international observers have endeavored to frame China as the “leader” or “spokesperson” of the Global South. Yet this narrative is grossly misleading. In reality, China has positioned itself as a natural member and steadfast partner of the Global South, functioning as an equal collaborator, systemic connector and agenda coordinator rather than aspiring for any hegemonic leadership. China’s strategic choice is to serve as a unique “bridge” spanning three dimensions: ideas, platforms and communication.

China’s rejection of a leadership role is rooted deeply in its diplomatic principles and historical experience. Its foreign policy fundamentally rejects hierarchical power structures. The Five Principles of Peaceful Coexistence — mutual respect for territorial integrity and sovereignty, non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence — form the cornerstone of China’s diplomacy, inherently opposing dominance and subordination. The traditional concept of tianxia (all under heaven) envisions a world order of harmony, not hierarchy. China aims to be a vital node within a network of interdependence, facilitating exchange rather than commanding authority. Moreover, China’s history as a semi-colony since the 1840 Opium War has instilled a deep aversion to hegemonism and unequal international systems. Having suffered under the center-periphery model, China understands how such dynamics weaken peripheral states. To become a new “center” risks repeating these dependencies. China’s commitment to “never seeking hegemony” is not just modesty but a strategic resolve shaped by history.

Furthermore, the Global South itself resists centralized leadership. Comprising over 130 countries across Asia, Africa, Latin America and Oceania, this group boasts immense diversity in history, culture, political systems, economic development levels and core interests. Small island states prioritize climate resilience differently from resource-rich inland nations; emerging economies may diverge from the least developed countries on trade liberalization. The strength of the Global South lies precisely in this diversity, rendering any single “leader” impracticable and unlikely to be welcomed. China respects this reality, engaging through inclusive multilateral frameworks — the G77 and China, BRICS, the Forum on China-Africa Cooperation and China-CELAC Forum — all rooted in consultation, joint contribution and shared benefits, not Chinese dominance. Notably, the BRICS rotating presidency — epitomized by India’s 2026 tenure focusing on inclusive growth and sustainability — underscores the mechanism’s equal, polycentric essence, a stark contrast to claims of a China-led bloc.

China’s bridge role finds expression in three core functions. As a bridge of ideas, China links its development experience with other developing countries’ modernization endeavors, providing a reference point rather than imposing rigid models. For decades, developing nations were presented with a singular “one-size-fits-all” solution: the Western liberal market economy and multiparty democracy. China’s success demonstrates that modernization is not a one-way street. Through the Belt and Road Initiative, China shares experiences in incremental reform, targeted poverty reduction, industrialization and social governance while tailoring cooperation to partners’ specific needs. Projects such as the China-Egypt TEDA Suez Economic and Trade Cooperation Zone and the Mombasa-Nairobi Standard Gauge Railway are critical infrastructures that have bolstered local capacity for self-sustained development — “teaching people to fish” rather than “merely giving them fish”.

As a bridge of platforms, China links developing nations’ aspirations to the global governance architecture. The post-World War II order, long dominated by Western powers, has a “governance deficit” that marginalizes developing countries’ interests. China pushes for reform of the international financial institutions to amplify their voice and voting power, while establishing the Asian Infrastructure Investment Bank and the New Development Bank as complementary mechanisms. The NDB’s 2022-26 strategy targets $30 billion in approvals — 40 percent for climate initiatives and expanded local currency financing — directly responding to key Global South priorities: sustainable development funding and currency risk mitigation. In climate governance, China upholds the principle of “common but differentiated responsibilities”, committing to peaking carbon emissions before 2030 and achieving carbon neutrality before 2060 while safeguarding developing nations’ right to development and urging developed countries to fulfill their financial and technical support obligations. The historic BRICS expansion, welcoming Saudi Arabia, the United Arab Emirates, Iran, Egypt, Ethiopia and Indonesia, reinforces China’s commitment to forging inclusive platforms, not exclusive blocs.
As a bridge of communication, China synergizes South-South cooperation with North-South dialogue. Amid escalating geopolitical competition, China rejects the perilous narrative that portrays the Global South’s ascent as a confrontation with the Global North. Instead, China promotes constructive engagement. The 2026 China-Africa Year of People-to-People Exchanges — with nearly 600 planned activities — exemplifies the deepening of South-South cooperation. Simultaneously, China is leveraging its position in the G20 to facilitate North-South coordination, notably assuming a pivotal mediating role in the Debt Service Suspension Initiative during the pandemic, coordinating traditional creditors, emerging creditors and debtor nations to stabilize the global financial system.

Detractors contend that China “shirks leadership responsibilities” or practices “strategic ambiguity”. This misinterprets the exacting demands of the bridge role. Building effective bridges requires greater diplomatic acumen, resource commitment and strategic forbearance than nominal leadership. It demands understanding diverse interests, integrating competing proposals and forging consensus through patient dialogue — far more arduous than issuing unilateral diktats. In an era of intensifying great power rivalry and risks of fragmentation, China’s bridge role serves as a crucial stabilizer. It offers Global South countries a new pathway beyond “forced alignment” — one rooted in sovereign independence and pragmatic cooperation. When supply chains face politically motivated disruptions, China maintains market openness. When multilateralism erodes, China upholds the UN-centered international system.

Looking ahead, China will continue collaborating with Global South partners through frameworks such as the G77 and China, BRICS and the Shanghai Cooperation Organization to reform and refine — not upend — the international order. Priorities include crafting equitable rules for digital governance and artificial intelligence, fortifying global financial safety nets and deepening South-South cooperation on green development, public health and food security.

The portrayal of China as the “leader” of the Global South is a reductive misinterpretation. China’s choice to be a bridge rather than a leader represents a strategic, long-term decision anchored in cultural tradition, historical memory, national interests and a keen grasp of contemporary trends. This choice respects the Global South’s aspirations for sovereignty and independence, demonstrates genuine commitment to global peace and development, and embodies a new type of major-country statesmanship that transcends traditional power politics. The bridge epitomizes connectivity, dialogue, cooperation and mutual benefit — it signifies responsibility without hegemony, empowerment without domination and inclusivity without exclusivity. As the Global South ascends, China stands poised as a sturdy, reliable and unimpeded bridge, helping nations surmount development gaps, unite aspirations and jointly build a community with a shared future for humanity.

India
Source: www.thehindu.com

Hoping to paper cracks in BRICS over war, New Delhi sends out invitations for FMs’ meet and SummitIran-UAE tensions over strikes, U.S. boycott of South Africa at G-7, G-20 pose diplomatic challenges for India

Hoping to forge an elusive consensus over the war in West Asia, New Delhi is going ahead with planning key meetings of BRICS countries this year in India, and has sent out invitations for the BRICS Foreign Ministers’ Meeting to be held in May and the 18th BRICS Summit in September.

According to a number of officials and diplomats, the invitations to the 10-nation grouping that also includes Iran and the United Arab Emirates went out in mid-March. Both countries have rebuffed several attempts by India— as the current Chair of BRICS— to issue a joint statement. Officials said it is unclear whether they will attend the meeting together, but that “as of now” the BRICS Foreign minister’s meeting is due to be held in-person in mid-May. The summit, which could bring Russian President Vladimir Putin, Chinese President Xi Jinping and leaders from Brazil, South Africa, Egypt, Ethiopia, Indonesia, Iran and the UAE together in Delhi, is expected to be held on September 9-10.

“One of the key events on the political track, in addition to the traditional leaders’ meeting [in September], will be the BRICS Foreign Ministers’ Meeting, scheduled for May,” Russian government spokesperson Maria Zakharova told journalists in Moscow this week. “This will be a good opportunity for a thorough discussion of current issues on the international agenda, the role of BRICS in the world, and opportunities for joint action,” she said, responding to questions about how the grouping of emerging non-Western economies would tackle the war in West Asia, where Iran has responded to U.S.-Israel strikes since February 28 by targeting Gulf countries, especially the UAE. 

With India being the 2026 Chair of the grouping, diplomats have openly acknowledged difficulties in forging a statement that is agreeable to both Tehran and Abu Dhabi. 

“We have an ongoing conversation with BRICS members on the conflict in West Asia,” Ministry of External Affairs spokesperson Randhir Jaiswal said at a media briefing on Friday (March 27, 2026). “As you’re aware, some of the BRICS members are also involved directly in the conflict… Because we have differing opinions, it has been difficult for us to forge a consensus on this particular conflict.”

In June 2025, the BRICS, then chaired by Brazil had managed to issue a strong statement when the U.S. and Israel jointly struck a number of Iranian nuclear sites, condemning the military strikes against Iran as “a violation of international law and the Charter of the United Nations”, and expressed serious concern over “deliberate attacks on civilian infrastructure and peaceful nuclear facilities under full safeguards of the International Atomic Energy Agency (IAEA), in violation of international law and relevant resolutions of the IAEA”. 

While Iran had launched missiles and drones at Israel last year, after the attacks that killed its Supreme Leader Ali Khamenei on February 28, Iran broadened its strikes to U.S. bases and other buildings across several Gulf states, which India has condemned. 

New Delhi’s failure to forge a consensus amongst countries to discuss the current conflict and energy crisis was criticised by the Opposition during an all-party meeting on Wednesday (March 25, 2026) chaired by Defence Minister Rajnath Singh. According to sources, Opposition MPs asked External Affairs Minister S. Jaishankar why he had not convened meetings of his counterparts from the BRICS, as well as the U.S.-India-Japan-Australia Quad grouping, both of which India chairs this year, and both of which include members who are involved in the war. 

Mr. Jaishankar is believed to have explained the difficulties in the situation, adding that despite not being able to forge statements, India was one of the very few countries engaging all parties in the conflict. 

Italy
Source: thinkbrics.substack.com

The illusion of the BRICS as a «bric-à-brac»: why the West is wrong to underestimate the resilience of BRICS+Despite media skepticism and the new Middle East war, the Indian-led bloc isn’t disbanding in 2026—it's accelerating geoeconomic integration, starting with food and energy security.

Think BRICS
Mar 29, 2026


The Western «bric-à-brac» myth

The BRICS: a grouping that the West struggles significantly to frame, understand, and describe. They evade the logic of traditional intergovernmental organizations, do not represent a unitary entity, and do not propose a seemingly shared geopolitical vision. For this reason, Western media frequently describe them using the expression «bric-a-brac», which implies a hodgepodge of little value or junk from a second-hand dealer.

Looking back at the newspaper pages written on the subject of BRICS, it is impossible to define precisely who first used this moniker: as early as 2013, an article in the French newspaper Le Monde was headlined «the bric-à-brac of the BRICS». It is an epithet used to downplay something that falls outside the scope of Western political thought, and which, as such, is ridiculed and belittled.

Following the 16^th BRICS Summit in Kazan, Russia, in 2024, the Financial Express revived the moniker, pointing out how the BRICS are generally perceived as a group of «mid-sized economies […that] lacks cohesiveness to have geopolitical significance». The expression has also been adopted by other Western media outlets, including Italian ones.

Why the BRICS elude Western paradigms

Criticisms of the geoeconomic aggregate of the expanded BRICS, defined as BRICS+, increased particularly following the summit held in Rio de Janeiro in July 2025; on that occasion, the Financial Times headlined «the BRICS lose their clout», describing how the enlargement – now comprising eleven member states and ten partners – makes this group increasingly heterogeneous and less capable of acting. The article also highlighted the signs of weakness that emerged during the Rio summit, including the absence of the Chinese president and the Russian president’s attendance solely via videoconference.

In parallel, Bloomberg reported that «critics say BRICS, which represents 49% of the world’s population and 39% of global GDP, perennially fails to punch its weight». The same outlet, however, admitted that they are «unwieldy, […] still refuse to go away. Countries are queueing up to participate as partners» making it, in fact, «is getting increasingly hard to ignore».

The primary criticisms leveled at this grouping by the Western political intelligentsia and mainstream media concern its political-institutional heterogeneity, highly significant internal divergences, and the lack of economic coherence and a unified geopolitical vision. In the eyes of pro-Atlantic analysts, the BRICS+ are nothing more than a collection of vastly different nations, geographically distant and politically non-aligned. They are states that, in some cases, do not appear to share common interests; in others – particularly China and India – they maintain open economic frictions and significant territorial disputes.

2026: The Indian presidency amidst global crisis

In 2026, India assumed the presidency of BRICS+, finding itself operating in a dramatically complex international geopolitical context: the introduction of new American sanctions, the kidnapping of Venezuelan President Nicolás Maduro, the new crisis in Cuba, and the attack by Israel and the United States on Iran, which caused the partial closure of the Strait of Hormuz, effectively blocking about 20% of the world’s fossil energy and other essential economic products, such as nitrogen fertilizers, which are indispensable for modern agriculture.

In this scenario of extremely high tension, with a member country – Iran – directly involved in an open conflict, the most diverse criticisms have once again rained down upon the BRICS+. The Wall Street Journal defined the bloc as «a house of cards», while Foreign Policy referred to the BRICS as something «little more than an illusion». Deutsche Welle highlighted that the Israeli-US attack on Iran has «shows fault lines in BRICS alliance» and the Hungarian Institute of International Affairs indicated that the events in Venezuela have «severely undermined the credibility of BRICS as an effective protector of the interests of the Global South».

Once again, the Western world struggles to fully comprehend the essence of the BRICS, as they are neither a formal institution nor a military alliance, such as the European Union and NATO. There is a failure to see how they are instead a platform for dialogue and cooperation, which, beyond the mainstream Western narrative, is reacting with extreme pragmatism to international geopolitical challenges, consolidating its own architecture in an increasingly multipolar world where the countries of the Global South are increasingly becoming emerging economies.

BRICS Geoeconomics: From Food to Energy

An example of the BRICS’ pragmatism is provided by the establishment and activities of the New Development Bank Brics, which has been operating since 2014, particularly in the financing of major infrastructure projects – including for example the Indian railway connecting Delhi-Ghaziabad-Meerut – even in favor of countries that are not directly part of the BRICS.

Another example is the creation of the BRICS Grain Exchange platform to promote the trade of agricultural and food commodities within the group, shielded from Western stock exchanges. This has been defined as the most radical move in the geopolitics of food in recent decades, as it elevates agriculture to a global strategic priority and an instrument of stability and power. The goal is the agricultural and food autonomy of the group: establishing prices in local currencies and reducing dependence on Western exchanges and the US dollar, also to avoid external speculation and sanctions.

In the energy sector as well, the BRICS play a central role, prioritizing sustainability more than certain Western nations. A study by the Net Zero Policy Lab at Johns Hopkins University highlights that investments in “green” energy within the BRICS group have surpassed investments in fossil fuels. The analysis reveals that the objectives of this transition do not solely target climate aspects but are defined to «accelerate the energy transition, reduce import dependency on foreign supply chains, strengthen manufacturing, create jobs, and enhance national security».

A final note: in the context of the Israeli-US aggression against Iran, it should be noted that in particular Russia and China are providing food, medical, and diplomatic support to Iran, as well as, according to some sources, intelligence support. To the critics who believed that Russia and China would go to war alongside Iran, it must be pointed out that the Islamic Republic does not appear to have requested military support from these countries.

In the face of global chaos, Russian Foreign Minister Sergey Lavrov highlighted that «some specialists, including those in Russia who study the history of international relations, have already begun to describe and characterize these events as World War III». In this context, the presumed «bric-à-brac of the BRICS» is proving itself not only resilient but is quietly building the foundations of an increasingly self-sufficient multipolar order.

USA
Source: africa.businessinsider.com

BRICS members Russia and Ethiopia deepen partnership with bold industrial plans

As constituent members of the BRICS economic bloc, the Russian Federation and Ethiopia have sustained a mutually beneficial partnership, which both sovereign states are committed to consolidating moving forward.

L-R President of Ethiopia Abiy Ahmed, and President of Russia Vladimir Putin

• Russia and Ethiopia, both BRICS members, are strengthening their partnership with a focus on industrial collaboration and joint ventures.
• High-level talks in Addis Ababa included agreements on expanding cooperation in unmanned technologies, pharmaceuticals, agriculture, and energy equipment.
• Both countries are interested in enhancing industrial capabilities, particularly by establishing Russian manufacturing facilities in Ethiopia's state-owned economic zone.
• Meetings also addressed further cooperation in agriculture and defense between the two nations.

Per a recent report, both BRICS member states have reached an agreement to bolster industrial collaboration and investigate potential joint production ventures.

This development follows high-level meetings conducted yesterday in Addis Ababa, coinciding with the official visit of Aleksey Gruzdev, Russia's Deputy Minister of Industry and Trade.

The Russian Deputy Minister met with Ethiopia's Minister of Industry, Melaku Alebel, to discuss cooperation between both states.

During the meeting, both parties talked about growing partnerships in areas such as unmanned technology, pharmaceuticals, and agricultural and energy gear.

The conversation brought to light a common interest in enhancing industrial capacities and creating cooperative production initiatives.

Exploring prospects within Ethiopia's first state-owned special economic zone was one of the visit's main objectives.

As a step toward greater industrial integration and technology transfer, both parties decided to look into the terms for localizing Russian manufacturing facilities in the East African country.

Outside of its meeting with the Melaku Alebel, the Russian delegation met with Ethiopia’s Minister of Agriculture, Addisu Arega, to discuss cooperation in agriculture, as seen in AllAfrica.


Additionally, Ethiopia's Air Force Commander, Yilma Merdassa, met with Russia's Deputy Minister of Defense, Vasily Osmakov.

Russia and Ethiopia’s 2025 trade figures

Amid a shifting global trade landscape and deepening economic ties between emerging partners, new data highlights a remarkable uptick in bilateral commerce.

Trade between Russia and Ethiopia surged to more than $435 million in 2025, nearly tripling from the previous year.

The Russian Ambassador to Ethiopia, Evgeny Terekhin, in February disclosed the figures in comments to Russian state media, attributing the sharp rise to stronger exports of fertilisers, agricultural machinery, and energy equipment from Russia, alongside growing Ethiopian sales of coffee, flowers, and textiles.

According to the ambassador, Ethiopia’s coffee exports to Russia rose from about $46 million in 2024 to an inflation-adjusted $123 million in 2025.

India
Source: www.gatewayhouse.in

BRICS CBDCs can lead to financial multipolarity

India’s proposal to link the digital currencies of the BRICS nations could alter how emerging economies settle trade deals. It is necessary to examine the reasoning behind such a move, its effort to reducing dollar dependence, and the benefits that accrue to India.

India is preparing to host the BRICS[1] summit in 2026, and in the run-up to the meeting, the Reserve Bank of India (RBI) has put out a proposal to link the digital currencies of the BRICS nations. This will cover the expanded BRICS, now comprising the original Brazil, Russia, India, China, South Africa along with newcomers Indonesia, Egypt, Ethiopia, Iran and the United Arab Emirates.

The timing of the RBI proposal is intriguing. It is clearly a move towards autonomy for the emerging and developing BRICS member states – and certainly not a knee-jerk reaction to the turbulent trade talks with the U.S.

What does the proposal mean, and what does it intend to do?

Central Bank Digital Currency (CBDC) is a country’s sovereign currency in digital form. It is not cryptocurrency and not prone to volatility risks. The CBDC is issued by the central bank of the country, like the RBI in India, and considered legal tender money. It only differs from fiat currency in that this is digital and not printed, offering the convenience of digital payments with the stability of cash.

The move to link digital currencies is a bold step towards removing a third currency, typically the U.S. dollar (USD), from the payment settlement system for international trade between BRICS nations. For instance, when importing crude oil from Russia, instead of first converting Indian rupees (INR) to USD and then into Russian rubles or Chinese yuan, trade can be settled directly through the linked CBDCs. Similarly, the export of petroleum products by India to Brazil would be settled through the linked CBDCs instead of USD.

Currently, the proposal has only been mentioned as a part of the agenda for the BRICS summit, and the details of the plan have not been made available. However, it is likely to draw inspiration from similar projects that have been initiated in the past. In 2021, Thailand, the UAE, China and Hong Kong collaborated to launch Project mBridge, with Saudi Arabia joining in later as a full member. It aimed to explore a shared multi-CBDC platform to enable cross-border payments and settlements to move with speed, efficiency and at lower cost. It reached the minimum viability product stage in 2024 and continues to expand.[2]

Similarly, Project Aber explored the possibility of a single dual-issued digital currency between Saudi Arabia and the UAE.[3] Australia, Malaysia, Singapore and South Africa developed prototypes for a shared platform for international settlement using CBDCs under Project Dunbar.[4] There have also been other negotiations and trials for digital currency-based cross-border settlement.[5] However, these initiatives are not yet operational at the required scale to produce enough evidence in favour of, or against, RBI’s proposal, which aims to be much larger in scope and membership.

Given that BRICS member states have been toying with the idea of an alternate unified digital currency for payment and settlement, this proposal could serve as a call for unification, collaboration and execution.

A CBDC-linked system of payment settlement will promote trade between BRICS nations via a common mechanism without having a separate BRICS currency.[6] With BRICS members contributing $5.61 trillion to exports and $4 trillion[7] to imports and accounting for 40% of the global economy in 2024,[8] it is reasonable that they develop payment systems beneficial to them collectively yet allows member nations to operate independently. Geopolitically it reduces risk by skirting the SWIFT payment settlement systems and specifically, domestic. MSMEs will benefit from low banking and conversion costs.

In 2024, India’s BRICS imports were over 40% of its total imports, with crude oil imports from Russia being a major contributor. Exports to BRICS nations accounted for about 22% of total exports.[9] If this proposal can reduce foreign exchange fluctuation risks and costs for these large trade volumes, it will be beneficial for Indian traders who can use this working capital elsewhere. Additionally, it may open up new markets and opportunities among BRICS nations owing to the ease of doing business.
Some might view the proposal as anti-American and a move towards proximity to Eastern powers (specifically Russia and China), but this is a narrow perspective. India is not yet equipped to operate without having the U.S. as a significant trading partner. U.S. sanctions and recent diplomatic developments between the two countries have seen instability, but in February, the trade deal with the U.S. was finally negotiated and will be ratified. This is not in opposition with India’s continuing endeavours on currency and economic resilience.

For some time now, India has been working on the wider acceptance of the Rupee as an international currency of trade. In 2022, India introduced the special Rupee-Vostro account, which allowed settlement of international trade in INR. This was an additional, complementary arrangement to the existing system that uses freely convertible currencies aimed at reducing exchange rate risk for Indian exporters and importers. India’s allowance of international trade in INR is also a step towards reducing dependence on the USD.

At present, the majority of the trade between India and Russia takes place in local currencies.[10] Even administrative steps like cutting approval time for foreign banks to open Rupee accounts being reduced to 24 hours – strategic moves towards making INR a favourable currency for settling international trade.

Thus, the RBI’s proposal seems to be a sequenced step that allows not only India but all other BRICS members to operate on an ‘in-house’ settlement system that saves costs and boosts trade. As a bonus, the members that have already attempted such initiatives can bring their learnings to create synergy and positive outcomes.

Is achieving this is mission impossible? No. Will this be a smooth ride to its destination? Definitely not.

To begin with, not all BRICS nations have an operational digital currency. China, Russia and India do and are expanding its use; Brazil, South Africa and the UAE are testing and preparing to launch their own CBDCs, while other member states are at various stages of this journey.[11]

Secomd, a linked system will have interoperability issues. Each country has its own regulations and will want to maintain financial sovereignty. An initiative of this nature will have to navigate a fragmented regulatory environment while ensuring financial stability on the domestic front. It is necessary to put in place stringent laws related to data-sharing and strong cybersecurity measure due to lack of technological standardisation. A strong dispute resolution mechanism and anti-money laundering regulations are critical components to ensure that the system is not misused. The stability of political regimes too will play a part in defining the viability of the proposal.

Finally, a functional mechanism to manage trade imbalances is crucial to avoid unnecessary accumulation of reserves.

The West may view the proposal to link the digital currencies of the BRICS as a skirt-around to sanctions and other global financial restrictions. For the rest of the world, it is a step towards the gradual streamlining of the foreign exchange market. If successfully implemented, this will be a significant geo-economic shift and an ambitious step towards autonomous international trade, at least for trade between BRICS. It will also position India and the BRICS as global digital finance leaders. It won’t replace current systems in the near future but can gradually gain traction and bear fruit. Thereby, BRICS is not just asking for a seat at the table – its creating its own table.

References:

[1] The BRICS is a group formed by eleven countries: Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia, and Iran. The acronym BRIC was conceived in 2001 based on the four founding members Brazil, Russia, India, China and the letter ‘S’ was added when South Africa joined the 2011. The rest of the six members were added in 2023.
[2] Bank for International Settlements. “mCBDC Bridge.” https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm
[3] Saudi Central Bank (SAMA). Project Aber Report. https://www.sama.gov.sa/en-US/News/Documents/Project_Aber_report-EN.pdf
[4] Bank for International Settlements. “Project Dunbar.” https://www.bis.org/about/bisih/topics/cbdc/dunbar.htm
[5] BRICS International Council. “Development of Central Bank Digital Currencies in BRICS Countries in 2024.” https://bricscouncil.ru/en/analytics/razvitie-ts-vts-b-v-stranakh-prisoedinivshikhsya-k-briks-v-2024-g
[6] BRICS. “About BRICS.” https://brics.br/en/about-the-brics
[7] Observatory of Economic Complexity (OEC). “BRICS.” https://oec.world/en/profile/international_organization/brics
[8] International Monetary Fund. “World Economic Outlook Database.” https://www.imf.org/external/datamapper/PPPSH@WEO/OEMDC/ADVEC/WEOWORLD  https://brics.br/en/news/brics-gdp-outperforms-global-average-accounts-for-40-of-world-economy
[9] BusinessWorld. “India’s Trade with BRICS Nations Nears $400 Billion Amid Rising Deficits.” https://www.businessworld.in/article/indias-trade-with-brics-nations-nears-400-bn-amid-rising-deficits-562402#:~:text=Rising%20Dependence%20On%20Brics%20Imports&text=The%20share%20of%20Brics%20in,of%20refined%20petroleum%20products%20globally.
[10] The Financial Express. “90 Per Cent of India–Russia Trade in Local Currency Now.” https://www.financialexpress.com/business/industry-90-per-cent-of-india-russia-trade-in-local-currency-now-3663287/
[11] BRICS Brasil. “CBDCs from BRICS: A New Chapter in Global Financial Modernization.” https://bricsbrasil.com.br/en/cbdcs-from-brics-a-new-chapter-in-global-financial-modernization/

TAGGED UNDER: bilateral meetings, bilateral talks, BRICS, BRICS countries, BRICS currency, brics ndb, BRICS Trade, CBDC, China in BRICS, dedollarisation, India in BRICS, multi-lateral BRICS bank