How BRICS expansion is a gain for India, not a victory for China

The BRICS summit in Johannesburg, from 22 to 24 August,  attracted more attention than any other BRICS summit so far. There was a hype created to make BRICS a part of the evolving power rivalry rather than keep to its path of economic development and support for the Global South.

BRICS is a curious mix of two different strands of thought, even though it emerged in 2006 as an acronym of disparate, unconnected countries seen as important economies. In the late 1990s, India, Russia, and China (RIC) had a foreign ministerial meeting that continued until 2021. In 2003, India, Brazil, and South Africa (IBSA) was also created at the level of foreign ministers to have a three-continent, three-democracy interaction and serve as a model for development cooperation among the Global South. While the RIC had no development cooperation agenda, the IBSA fund was impactful. The BRIC started in 2006, and a summit was launched in 2009. South Africa was included in 2010. It came through the IBSA route, not from BRIC’s original logic. It had the advantage of bringing in a representative from Africa, which is a democracy as well—South Africa. But the fusion of the RIC and IBSA has remained incomplete.

The BRICS summit now shows that clearly. Since 2009, BRICS has been an effort to provide an alternative form of support for global development. Its best achievement is the New Development Bank (NDB), with equal contributions from all five countries. The NDB recently admitted three new members: Bangladesh, the UAE, and Egypt. While each of the original BRICS countries has an 18.98 per cent share (about $10 billion each) in the NDB, Egypt has 2.27 per cent, Bangladesh 1,79 per cent, and the UAE has 1.09 per cent.

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While NDB members can have both contributors and borrowers, it has not yet reached its full potential and requires more countries to subscribe to its capital and then come with a desire to borrow. The NDB is not a challenge to the Multilateral Development Banks (MDBs); it works somewhat differently and on a modest scale. Among its objectives are to co-finance projects with MDBs, local currency funding, and non-sovereign funding, focus on prime areas of sustainable development, and involve women in a bigger way.

The NDB’s steady progress needs to be supported. It is welcome that they have already raised a Rand 1.5 billion bond and will soon raise a rupee bond. This will help lower the cost of financing projects in India and South Africa in particular. Up to now, of the $30 billion that NDB invested, about $7 billion each has been deployed in India and China; about $5 billion each in Brazil and South Africa; and $4 billion in Russia.

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The expansion of the BRICS is not any victory for China. It perhaps nudged the pace faster than a consensus would have preferred. The criteria mentioned in the communiqué are not yet known. The six countries admitted are all developing countries, part of the Global South, and partners of India. Three of them are Arab (UAE, Saudi Arabia, and Egypt). Argentina represents Latin America. Ethiopia is the first least developed country to join the BRICS. Iran is the one country whose membership lends credence to the analysis that the BRICS may adopt an anti-West position. Other than Iran, the other new entrants are not anti-Western or overtly pro-China. All of them are seeking new opportunities and find BRICS a good way of getting into a more equal multipolar group.

Among the BRICS, none voted with Russia at the UN General Assembly on 23 February 2023. Brazil voted with the West, while India, China, and South Africa abstained. Among the new members, Ethiopia and Iran abstained; Argentina, Egypt, Saudi Arabia, and the UAE voted against Russia. Thus, the six new members are not Chinese acolytes or will back China or Russia on everything.

Five of them are strategic partners of India, and Ethiopia has a steadfast relationship with India. In the current phase of international relations, each country looks at every step through the prism of its national interest. How each country engages the other will remain dominant as BRICS brings camaraderie but not commonality of interest.

For India, it was clearly a rise in stature. The successful landing of Chandrayaan-3 during the summit gave the Indian proposal for space cooperation real heft. The confidence with which PM Modi spoke at the summit and its outreach events was palpable. Add to this the presence of the Indian diaspora in South Africa and the rousing welcome for PM Modi, as well as the large Indian contingent in the business forum, and you see the positive impact this has on the perception of India during the BRICS summit. If it was meant to be a Chinese show, then certainly it did not end up that way.

India has its own positions and successfully navigates them. When it came to expansion, it agreed, not because China wanted it but because six of its international friends were so enthusiastic that the decision to expand and include them acquired a bigger logic and hence succeeded.

India needs to be complimented for its positive approach towards the Global South and initiative to invite the African Union as a permanent member of the G20. These were eloquently stated by PM Modi in his speech to the summit. The offer of cooperation in a host of digital solutions for overcoming development and infrastructure gaps was timely and well noticed.

Modi’s address to the BRICS Africa outreach and BRICS Plus meetings was similarly positive and forward-looking. It maintained the IBSA spirit of pushing for cooperation among developing countries rather than RIC-style strategic preferences. While China and Russia do want to make BRICS more geopolitical so that they can use it in their rivalry with the West, India’s vision remains to keep BRICS on its middle path, providing strategic autonomy and choices while focusing on the development agenda that the Global South requires. Linking Indian G-20 initiatives to the further development of BRICS was a wise move and needs to be commended.

In the original BRICS, India was the only country where China was not the largest trading partner. Now, among the six new countries, other than Argentina, China is the largest trading partner of all of them. This dominant status is unlikely to change. Since BRICS is not a trading bloc and does not offer trade concessions, it is more about development cooperation and perhaps investments than developing trade.

Saudi Arabia is now a trillion-dollar economy after joining the BRICS. China, India, Russia, and Brazil were in that league already. Only these five countries are among the top 25 in terms of GDP. UAE and Argentina are over the half-a-billion mark. The rest seek avenues to develop.

Normally, the heft of the population provided in the BRICS was mainly because of India and China. Now there are countries with large populations, like Ethiopia with over 120 million and Egypt with over 110 million, in the BRICS. They are part of the highly populated north-eastern quadrant of Africa and will bring huge market opportunities if their population develops.

India presented splendid ideas for a digital economy and supported the Sustainable Development Goals. The trilateral efforts have started with India and the G7 countries in Africa and beyond. Now that the UAE and Saudi Arabia are in BRICS, India could work with them trilaterally in Africa, offering its solutions. Whether that is a BRICS nomenclature or a bilateral initiative with them is not the important issue, but the impact on the Global South is where we must measure our success.

The writer is a former ambassador to Germany, Indonesia, Ethiopia, ASEAN and the African Union. He tweets @AmbGurjitSingh. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost_’s views._

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