BRICS

BRICS

News: The BRICS summit is in the news.

Background:
• This is start of many articles concerning BRICS that we will cover. For now, this article focuses on India’s concern pertaining to expansion of the BRICS grouping.

What is BRICS?
• BRICS is a group of five major emerging economies: Brazil, Russia, India, China and South Africa. They hold annual summits to discuss various issues of global and regional importance, such as trade, security, development, energy, health, etc.
• BRICS represents about 41.5% of the world population, 26.6% of the world GDP (nominal), and 32.5% of the world GDP (PPP) as of 2018.
• The term BRICS was coined in 2001 by Jim O’Neill, a Goldman Sachs economist, who predicted that these countries would collectively dominate the world economy by 2050.

What are the initiatives taken by BRICS?
• New Development Bank, the Contingent Reserve Arrangement, the BRICS payment system, BRICS Joint Statistical Publication, Customs Agreement, Remote Sensing Satellite.

What are the Criteria for BRICS expansion?
• There is no formal application process as such to join BRICS, however, certain eligibility features are considered for new members.
• For example, India had suggested a minimum of $400bn GDP economy size for new members, India had suggested minimum BRICS trade of $50 billion with the new member, the country should demonstrate characteristics of an emerging economy and stable political environment is another criteria.

How is China influencing BRICS?
• China is advocating for expansion of BRICS by adding new members.
• China sees BRICS as a political platform to mobilize the non-western world in its rivalry with the US. Balancing the US was also the original motivation for Moscow in promoting BRICS.
• China leverages BRICS to engage with other influential groups like the Shanghai Cooperation Organisation, which it largely dominates, further enhancing its sway within BRICS.

What is India’s stance on expansion of BRICS?
• India has not been very enthusiastic about the expansion of BRICS membership so far, as it is basically an exercise initiated by China to increase its clout in the grouping.
• “Since almost all other members are now open to the expansion process, including Brazil, which wants Argentina as a member to increase the weight of Latin America, India has accepted to go on the BRICS expansion plan even with some relaxation in GDP and Trade criteria.

Why is upcoming BRICS summit important for India?
• Offers India a chance to secure full attendance of leaders as we host G20 summit next. Presence of all BRICS members stands crucial.
• The summit offers opportunities for bilateral talks on the LAC issue.
• India seeks increased cooperation from China and Russia on various issues like the Leader’s declaration content, especially paragraphs on Ukraine, climate change, debt financing, etc.