BRICS and India

• The term was coined by Jim O Neil, an economist at Goldman Sachs, in 2001 as BRIC (Without ‘S’)
• BRIC was officially formed at the Yekaterinburg summit in 2009. South Africa joined the bloc in 2010, and it became BRICS.
• It is an ‘Economic grouping with political motives’.
• The notion behind the coinage was that these nations’ economies would collectively dominate global growth by 2050. Along with that, if BRICS nations start to trade in their domestic currencies, it would break the dominance of the dollar.

• Membership: Brazil, Russia, India, China and South Africa
• It is a non-western multilateral economic organization.
• Purpose goals: economic and geopolitical.
• Norms: BRICS follows the norms of non-interference in each other’s internal affairs and respects other international institutions.
• BRICS is against uni-polarity and searches for multipolarity.

BRICS is a unique organization of countries that came together not because of geography, history or wealth, but because of their promise as key “emerging economies”.

• Western economies faced the 2008 financial crisis while the BRICS nations kept on growing during that phase.
• IMF and World Bank have become unrepresentative institutions dominated by western economies. BRICS countries shared a common objective of reforming the international financial and monetary system dominated by IMF and World Bank.
• Search for multipolarity was another reason for the formation of BRICS.

• Economic Importance :
  • The combined GDP of BRICS nations account for roughly 25% of the total gross world GDP. 
  • BRICS nations are the fastest growing economies of the world.  
  • BRICS nations are lucrative investment destinations in the world. 
  • Emerging multilateral financial institutions like AIIB and BRICS Bank are alternatives to Western-dominated World Bank and IMF. 

• Political and military: China, Russia, and India are the most powerful countries by military strength after the US with advanced naval forces.   

• Demographic: BRICS nations account for nearly 42% of the world population, with a considerable number in working-age groups.

• BRICS membership elevates India’s global profile. China may still not be interested in dehyphenating India and Pakistan, but India’s BRICS membership automatically de-hyphenates India and Pakistan while it casts India and China as equals.

• BRICS countries have emerged as the voice of the developing countries or the economic south. Furthermore, all the BRICS nations are members of G-20 and WTO and safeguard the interest of developing countries against the aggressive club of developed countries. 

• Safe Space to modulate rivalry: BRICS provides alternative space to keep the dialogue open in case of conflicts between the member nations. For example, during the Doklam Crisis, India and China remained engaged through BRICS.

• Competition: All BRICS countries want to become regional powers & frequently, their interests collide. 
• The dominance of the Chinese economy makes it the union of unequal members. Jim O’ Neil observed that the Chinese forex is bigger than all other BRICS nations combined.
• Members are too similar in some key areas. Hence, they don’t compliment each other. Each member has the same strength and weaknesses. 
• Too much Diversity in other areas like starkly varying political systems, economies, and national goals.
• Geographical separation: Members are fragmented along 4 different continents. 
• BRICS nations compete in third markets. In many areas, from clothing (China, India and Brazil), through economic influence in Africa (China, South Africa and India) etc. BRICS countries compete with one another.  
• Contradictions on Trade: Brazil and Russia are commodity-exporting countries and want high commodity prices, while China and India are importing countries.
• A large number of conflicting issues between members
  • India-China, China-Russia border disputes
  • China artificially undervalues Renminbi 
  • China has ~30 trade disputes with BRICS nations. 
• Diverging stands on multilateral forums
  • NSG: China stopping the entry of India in NSG.
  • UNSC reforms: India & South Africa want reforms while China opposes them.