Why in news?

After months of using tariffs to pressure allies and rivals into lopsided trade deals, US President Donald Trump has gone a step further. Recently, he warned the Federal Reserve (Fed) to cut interest rates, failing which the US would stop trading with countries with which it runs a trade deficit.

The threat has raised eyebrows in policy circles worldwide.

What’s in Today’s Article?

• A Pattern of Pressure on the Fed
• The Debt and Deficit Problem Driving the Threat
• Trade Partners at the Crossroads
• Three Fronts of Pressure on India
• The Interim Trade Agreement and Farmers' Concerns
• Steps India Has Already Taken
• Impact on the Textile Sector
• Compliance Beyond Tariffs

A Pattern of Pressure on the Fed

• This is not the first time Trump has sought to influence the Fed through extreme demands.
• During his first term, he routinely pushed for lower rates.
• In September 2019, he suggested the Fed bring interest rates down to "zero or less" so that the US could start to "refinance its debt".
• The latest warning fits this pattern but is far more aggressive.

The Debt and Deficit Problem Driving the Threat

• Trump's escalating warnings stem from growing anxiety over US debt and trade deficits.
• Key figures:
  • US national debt has crossed a record $40 trillion.
  • The trade deficit has widened despite a slew of tariffs on trading partners.
  • Rising oil prices due to the US-Iran war have made investors nervous, pushing the US 10-year bond yield, a benchmark for global borrowing costs, towards 5 per cent.
  • The US government is estimated to spend just over $1 trillion this fiscal year on interest payments alone, roughly equal to its national defence spending.
  • The US debt-to-GDP ratio has reached 125 per cent. By comparison, borrowing to finance World War II pushed the ratio only to 106 per cent.
• These uncomfortable numbers explain why Trump is targeting even close trade partners to narrow the trade gap while pushing for cheaper borrowing.

Trade Partners at the Crossroads

• The US has already narrowed its trade deficit with China to its lowest in two decades.
• It is now pressuring other partners to follow suit:
  • Recently, the US banned a broad range of Canadian alcoholic beverages, motorcycles and dairy products after trade ties with Canada escalated.
  • The US has renegotiated its existing deal with Mexico.
  • It has imposed one of two broad Section 301 tariffs on countries globally.

Three Fronts of Pressure on India

• For India, US pressure is playing out on three fronts:
  • Market access: Steep demands under trade deals for greater access to Indian markets.
  • Investment outflow: Pressure that encourages investment to flow from India to the US.
  • Reducing China dependence: Pressure to cut reliance on input items originating from China.
    • Washington believes China operates a "shadow transhipment network" that widens the effective US trade deficit, displaces domestic production, lowers GDP growth and reduces federal tax receipts.

The Interim Trade Agreement and Farmers' Concerns

• India and the US have been negotiating a bilateral trade agreement since February 2025.
• In February 2026, the two countries announced a framework for an Interim Agreement. This has created considerable tension, especially among farmers.
• Trade experts warn that lowering customs duties on US imports would directly threaten the livelihoods of Indian farmers growing apples, cotton, grapes, oranges, soybeans, walnuts and other crops.
• These fears are heightened by the fact that the US has for years challenged India's Minimum Support Price (MSP) on rice and wheat at the World Trade Organisation.
• There is also concern that the Interim Agreement could compel India to set aside its domestic laws and mandatorily allow US imports if consignments carry certificates from US authorities.
• Experts warn this could open a backdoor for genetically modified products from the US.

Steps India Has Already Taken

• To ease US concerns amid tariff worries, India has taken several accommodating measures:
  • Stepped up energy imports from the US.
  • Lowered tariffs on a broad range of products of US interest, from motorcycles to whiskey.
  • Announced tax holidays for data centres and for items needed to boost nuclear power production.
• The shift in energy sourcing is striking. The US share in India's LPG imports has surged to over 50 per cent in the six months since the West Asia crisis began, up from less than 10 per cent in the preceding six months.
  • Before the war, India's LPG imports were dominated by Gulf suppliers such as the UAE, Qatar, Kuwait and Saudi Arabia.

Impact on the Textile Sector

• The US has introduced forced labour-related Section 301 tariffs. In response, the Directorate General of Foreign Trade (DGFT) explicitly prohibited imports of goods produced using forced labour.
• Fear of US scrutiny, especially restrictions on cotton from China's Uyghur region, is pushing cotton prices higher.
• India has advised exporters to maintain detailed employee data such as wage records, age verification and supplier declarations. It warned that strong labour and supply chain documentation is now a "commercial necessity" for accessing the US market.

Conclusion

Trump's threat to the Fed reflects deep anxiety over record US debt and persistent trade deficits. For India, the fallout is real: pressure on farmers through the Interim Agreement, rising input costs for textiles, shifting energy dependence and heavier compliance burdens for exporters. India must balance accommodation with protection of its core economic interests.

Why in news?

Chinese President Xi Jinping is arriving in India to attend the 18th BRICS Summit in New Delhi. This is his third visit since becoming President and his first in seven years.

While the stated purpose is the summit, the visit carries deep bilateral significance because of the 2020 border standoff that pushed relations to a low point. Experts argue that the China-India fault line, combined with a turbulent global environment, will heavily influence the summit's outcome.

What’s in Today’s Article?

• The Uneven Journey of BRIC Members
• China's Rising Assertiveness
• Partial Thaw, Persistent Distrust
• The Global Backdrop to the Summit
• The Iran-UAE Polarisation
• Competing Visions of BRICS
• India's Strategic Signalling
• Conclusion

The Uneven Journey of BRIC Members

• The term "BRIC" was coined in 2001 when Goldman Sachs analysts identified Brazil, Russia, India and China as the world's emerging economies.
• The grouping took shape in the aftermath of the 9/11 attacks. Twenty-five years later, the members have followed very different paths:
  • China has surged ahead to become the world's second-largest economy after the US.
  • India has grown at a modest pace but has been outpaced by China by a wide margin.
  • Russia has faced challenges due to wars of its own making.
  • Brazil has struggled amid frequent regime changes and scandals.
  • South Africa, a later entrant, has not lived up to expectations.
• Since the first leaders' summit in 2009, held in the shadow of the global financial crisis, China has emerged stronger, having weathered the crisis better than many Western nations.

China's Rising Assertiveness

• China's rise is not just economic. It has grown militarily with ambitions to displace the US as the leading global power. This is reflected in its aggressive posture in the South China Sea, the Indo-Pacific and along its border with India.
• India has borne the brunt of repeated border confrontations. After the 1962 war and the 1967 clashes in Sikkim, major standoffs include:
  • 2013: Depsang, Ladakh
  • 2014: Chumar, Ladakh
  • 2017: Doklam
  • 2020 onwards: Eastern Ladakh, still ongoing with about 50,000 Indian troops deployed along the Line of Actual Control (LAC)
    • The June 2020 clashes killed 20 Indian defence personnel, including a Colonel-rank officer, and at least four Chinese personnel.

Partial Thaw, Persistent Distrust

• Years of diplomatic and military talks led to troop disengagement in 2024. Since then, incremental steps have stabilised ties:
  • Resumption of direct flights
  • Easing of visa restrictions
  • Restarting the Kailash Mansarovar Yatra
  • Relaxation of restrictions on Chinese investments
• Yet structural differences remain. India runs a massive trade deficit with China and has repeatedly flagged the lack of market access for Indian businesses. India is also acting against Chinese firms for tax evasion.
• Most importantly, strategic and political trust has been badly damaged by the border standoff, now in its seventh year.
• China's collusion with Pakistan during Operation Sindoor further deepened the crisis of trust and credibility.

The Global Backdrop to the Summit

• The summit, attended by leaders of over 30 countries and groupings, takes place amid major global shifts:
  • US tariffs: President Donald Trump's arbitrary tariff moves have cornered countries worldwide, including China and India. The two now find themselves on the same side in trying to counter the effects.
  • War on Iran: Trump's military action against Iran has raised questions about powerful nations violating territorial integrity and sovereignty. However, China and Russia are guilty of the same in their own neighbourhoods.
  • Economic cost of the West Asia war: Energy prices and inflation have risen, and BRICS countries, as part of the Global South, are bearing the brunt.
• The key question is whether this moment of shared concerns between India and China can become an opportunity to improve ties and unite developing countries on common issues.
• Xi's visit is seen as a positive signal, but only to a degree.

The Iran-UAE Polarisation

• The West Asia war has split the grouping. Iran is attacking US military bases in the region, while the UAE hosts several such bases and personnel.
• Here, India needs China's weight to push the two members towards cooperation and present a more unified front.
• Whether India and China can reach consensus on such matters, and build on recent gains, will shape not only their bilateral relationship but also the effectiveness of BRICS itself.

Competing Visions of BRICS

• Beijing has long viewed itself as "first among equals" within BRICS. It backed expansion from the original five members, aiding the 2023 decision that brought the grouping to its current strength of 11.
• A deeper divergence lies in purpose. China and Russia frame BRICS as an "anti-West" grouping, while India sees it as a "non-Western" grouping.
• This is complicated by US actions against fellow members, such as tariffs on Brazil and political disagreements with South Africa.
• India is decidedly not anti-West. It has built robust ties with the US over 25 years and is pursuing closer partnerships with Europe, Australia, Canada and other Western nations.
• India relies on the West for capital, technology and as a destination for its people far more than on China or Russia.

India's Strategic Signalling

• By hosting the summit, India also signals to the US that it has alternative partners in areas ranging from technology to fuel security:
  • The UAE and Saudi Arabia are investing in the Indian economy.
  • Russia has stepped in as an energy supplier amid the closure of the Strait of Hormuz.
  • Brazil is ready to partner on critical minerals.

Conclusion

Xi Jinping's visit offers a cautious opening for India-China ties, driven by shared pressures from US tariffs and the West Asia conflict.

Yet deep distrust over the border, trade imbalances and China-Pakistan collusion persists. The summit's success depends on whether the two Asian giants can set aside rivalry to keep BRICS coherent and functional.

Why in News?

• As India presides over the BRICS Summit in Delhi, its central diplomatic challenge is to project the grouping as a platform for reforming and democratising the international order,
• As both supporters and critics often interpret BRICS through an anti-Western lens, the perception that BRICS seeks to overthrow the US-led global system must be dispelled.
• There exists significant differences among BRICS members, and their objectives range from accommodation with the West and strategic autonomy to demands for greater parity and, in some cases, direct confrontation.

What’s in Today’s Article?

• BRICS Is Not a Unified Anti-Western Alliance
• Brazil - Reforming the Order from Within
• India - Non-Western Does Not Mean Anti-Western
• Russia and China - Competition with the West, Not Complete Separation
• New Members Complicating the Anti-Western Narrative
• Way Forward for India
• Conclusion

BRICS Is Not a Unified Anti-Western Alliance:

• India and Brazil particularly oppose transforming BRICS into an anti-Western bloc.
  Both seek a larger role in an international system that can provide greater trade, technology, investment and diplomatic influence.
• The political orientation of BRICS members towards the West exists on a spectrum -
  • Iran lies closest to the anti-Western pole, with resistance to US influence deeply embedded in its foreign-policy identity.
  • Russia and China are in strategic competition with the West but continue to seek recognition, influence and a greater role in shaping the international order.
  • India, Brazil and several newer members favour strategic autonomy, institutional reform and greater representation rather than confrontation with the West.
• Thus, BRICS is better understood as a coalition seeking greater agency for emerging and developing powers than as a coherent anti-Western alliance.

Brazil - Reforming the Order from Within:

• Brazil provides the clearest example of why the “West vs Global South” binary is inadequate.
• Although Brazil is a leading Global South power and strongly advocates reform of global institutions, its historical, cultural and institutional foundations are deeply connected to the Iberian and Euro-Atlantic world.
• Its constitutional democracy, legal traditions and diplomatic emphasis on international law and multilateralism reinforce this connection.
• Brazil therefore does not seek to overthrow the existing order from outside. Its approach towards the major powers is driven primarily by national interest rather than ideology.
• For instance, Brazil supports faster and cheaper bilateral payment mechanisms, including settlements in national currencies where beneficial.
• However, it does not support making de-dollarisation or a common BRICS currency the central objective of the grouping.
• A common currency would require substantial political trust, economic convergence and institutional integration, which BRICS currently lacks.

India - Non-Western Does Not Mean Anti-Western:

• As a post-colonial developing country, India seeks strategic autonomy and does not want to become a geopolitical appendage of the US or Europe.
• At the same time, India's partnerships with the US, Europe, Japan and Australia have expanded significantly in trade, technology, defence and other areas.
• India's simultaneous participation in BRICS and the Quad reflects this multi-alignment.
• For New Delhi, BRICS derives value from its diversity. However, its utility would decline if it evolved into a China-led alliance against the West.
• India therefore has an interest in keeping BRICS focused on reforming global governance rather than constructing geopolitical confrontation. 

Russia and China - Competition with the West, Not Complete Separation:

• Russia's conflict with the West has become deep and structural, particularly due to the Ukraine war, NATO's role in European security and Western sanctions.
  • Yet Moscow continues to seek recognition as a major power and a meaningful role in shaping European and global security arrangements.
• China presents a different contradiction. Beijing challenges US primacy in Asia, seeks to reduce vulnerabilities arising from Western technology restrictions and supports a more representative international order.
  • However, China's economic rise itself was closely connected with Western markets, capital and technology.
  • China therefore seeks not necessarily to exit the existing international system, but to obtain a more equal role in shaping it, including greater influence relative to the United States.

New Members Complicating the Anti-Western Narrative:

• The newer BRICS members also weaken the idea of a unified anti-Western bloc -
  • Egypt maintains important security ties with the US.
  • UAE has extensive economic and strategic relations with the US and Europe.
  • Indonesia follows a “free and active” foreign policy, preserving strategic manoeuvring space among competing major powers.
• These countries seek strategic autonomy, stronger ties with China and a greater Global South voice, but do not necessarily seek membership in an anti-Western alliance.
• Iran remains the major exception, as resistance to US and Israeli influence is central to the Islamic Republic's political identity.
  • For Tehran, BRICS provides diplomatic legitimacy and an avenue to counter US-led isolation.

Way Forward for India:

• India's diplomatic task at the summit is to ensure that autonomy from the United States is not equated with antagonism towards it.
• New Delhi should position BRICS as -
  • A platform for reforming global governance, rather than dismantling it.
  • A mechanism for enhancing the voice and representation of the Global South.
  • A forum for multipolarity and strategic autonomy, rather than bloc politics.
  • A vehicle for cooperation in areas such as development finance, technology, trade and alternative payment mechanisms, without forcing ideological uniformity.
  • A complement to India's other partnerships, including the Quad, rather than their geopolitical counterweight.

Conclusion:

• BRICS is united less by opposition to the West than by dissatisfaction with the unequal distribution of power in the existing international system.
• Its members have divergent strategic interests and varying relationships with the West.
• India can best advance its interests by promoting BRICS as a reformist, inclusive and multipolar platform—one that seeks a more representative international order without turning strategic autonomy into anti-Western confrontation.

Why in the News?

• The International Criminal Court (ICC) is facing growing institutional and political pressure as five countries- Venezuela, Chad, Burkina Faso, Mali and Niger- have announced plans to withdraw from the court within the past year.

What’s in Today’s Article?

• About ICC (Background, Objectives, Current Crisis)
• News Summary (ICC’s Challenges, New Members & Continuing Relevance, Significance & Challenges)

International Criminal Court: Background

• The ICC was established under the Rome Statute, which came into force in 2002.
• Headquartered in The Hague, Netherlands, it is a court of last resort for prosecuting individuals accused of the most serious international crimes.
• Its jurisdiction covers four core crimes: Genocide, Crimes against humanity, War crimes, & Crime of aggression.
• The principle of complementarity is central to the ICC. The court generally intervenes when national authorities are unable or unwilling to genuinely investigate or prosecute serious crimes.
• Unlike a domestic criminal court, the ICC does not have its own police force. Its ability to investigate, arrest and prosecute suspects therefore depends significantly on cooperation from states.

Current Crisis Facing the ICC

• Growing U.S. Pressure
  • The United States has significantly increased pressure on the ICC. In July 2026, U.S. Secretary of State Marco Rubio announced what he described as a campaign to dismantle the threat posed by the court to U.S. sovereignty.
  • The U.S. administration has also sanctioned ICC personnel and organisations associated with the court. The measures followed ICC actions involving arrest warrants against senior Israeli officials concerning the Gaza conflict and investigations involving U.S. personnel in Afghanistan.
  • Washington has also encouraged ICC member states that benefit from U.S. security arrangements to reconsider their membership.
• Countries Announcing Withdrawal
  • The recent withdrawals have involved countries with different political circumstances.
  • Chad specifically cited U.S. pressure in announcing its decision to withdraw.
  • According to its Foreign Minister, a U.S. official had expressed concerns regarding the ICC and requested that Chad reconsider its membership shortly before the withdrawal announcement.
  • Burkina Faso, Mali and Niger, all governed by military juntas, have instead accused the ICC of selective justice and neo-colonialism.
  • Venezuela has similarly criticised what it described as the instrumentalization of the court against national sovereignty and self-determination.

News Summary

• The ICC's present challenges are not limited to the United States. Some governments have long criticised the institution for disproportionately focusing on African conflicts.
• Burundi became the first country to leave the ICC in 2017, after the court opened an investigation into the country. South Africa and Gambia also announced withdrawals that year but subsequently reversed their decisions.
• The recent departures, however, raise a broader concern: whether states are prepared to bear political and diplomatic costs to preserve an international system of accountability.
• The ICC's jurisdiction also does not automatically end when a country withdraws. Withdrawal from the Rome Statute is not retroactive.
• Consequently, the court can continue investigating crimes committed while a country was a member or otherwise within the court's jurisdiction.
• This principle is particularly relevant to the Philippines. Although the country withdrew from the ICC in 2019, the court's investigation into alleged crimes associated with former President Rodrigo Duterte's anti-drug campaign continued.
• Duterte is currently in ICC detention in the Netherlands and faces charges of crimes against humanity.
• Similarly, the ICC's investigation into alleged crimes by Venezuelan security forces under former President Nicolás Maduro will continue despite Venezuela's announced withdrawal.

New Members and Continuing Relevance

• Despite the withdrawals, the ICC continues to attract countries seeking international accountability.
• Ukraine joined the ICC in 2025, having previously accepted the court's jurisdiction over crimes committed on its territory following the outbreak of hostilities with Russia in 2014.
• Ukraine has presented ICC membership as part of its effort to ensure accountability for serious international crimes.
• This demonstrates the contradictory pressures facing the ICC: while some governments are moving away from the institution, others view it as an important mechanism for addressing grave violations of international law.

Significance and Challenges

• The ICC represents an important development in international criminal law, particularly the principle that individuals, including political and military leaders, can potentially be held accountable for international crimes.
• However, its effectiveness is constrained by:
  • Dependence on state cooperation for arrests and evidence
  • Non-universal membership
  • Political opposition from powerful states
  • Allegations of selective enforcement
  • Limited independent enforcement capacity
• The present crisis therefore highlights a fundamental tension between state sovereignty and international accountability.

Way Forward

• Strengthening the ICC requires greater consistency in the application of international criminal law, stronger cooperation among member states and greater transparency in institutional decision-making.
• At the same time, concerns regarding selectivity need to be addressed through uniform legal standards and credible, independent investigations, irrespective of the political identity or geographical location of the accused.

Context

• The 18th BRICS Summit, hosted by India in New Delhi on September 12–13, 2026, comes at a time of geopolitical turbulence, wars, weakening global governance and shifting alliances.
• With 11 prominent members and around 10 partner countries, BRICS has emerged as a major transcontinental grouping whose collective economic output in purchasing power parity exceeds that of the G7.
• At the same time, artificial intelligence and quantum computing are becoming instruments of strategic competition.
• India therefore seeks to use its chairmanship to strengthen BRICS through resilience, innovation, cooperation and sustainability.

India’s BRICS Moment

• India’s extensive preparations reflect the organisational experience gained from hosting the G20 Summit in 2023.
• Around 350 meetings, including 22 at the ministerial level, have been organised across different Indian cities.
• BRICS traditionally rests on three pillars: political and security cooperation, finance and economic cooperation, and cultural and people-to-people exchanges.
• India’s current emphasis is particularly focused on the latter two pillars, where practical cooperation can deliver tangible developmental benefits despite political differences among members.
• The diversity of BRICS makes such an approach valuable.
• Its members differ in their political systems, economic structures and technological capabilities, but share several developmental challenges.

India’s Vision

• Building Resilience and Driving Innovation
  • Strengthening Resilience
    • India has promoted initiatives aimed at strengthening collective resilience.
    • The BRICS Digital Centre of Excellence for Smart Grids and Energy Storage can support modern energy systems, while the Logistics Supply Chain Cooperation Framework can reduce vulnerabilities arising from disruptions in global trade.
    • The Centres of Excellence on Agro-Ecology and Regenerative Agriculture can contribute to food security, sustainable agriculture and climate resilience.
    • Together, these initiatives can facilitate knowledge sharing, capacity building and adoption of best practices.
  • Promoting Innovation
    • India has also encouraged technological and scientific collaboration through proposals for a start-up innovation fund, incubator network, digital public infrastructure repository and science and research repository.
    • Greater cooperation in research infrastructure and mega science projects can help bridge technological disparities among BRICS members.
    • Such collaboration is increasingly important as countries compete for technological and scientific leadership in AI, quantum computing and other emerging technologies.
• Deepening Cooperation for Inclusive Development
  • BRICS cooperation must ultimately translate into improvements in citizens’ lives.
  • Proposals to revitalise the multilateral trading system, establish centres of excellence on mental wellness and create a BRICS urbanisation forum can address major economic and social challenges.
  • Initiatives for women’s digital empowerment, education, youth skilling and MSME cooperation can expand employment, entrepreneurship and economic participation.
  • Such measures can ensure that BRICS benefits extend beyond governments and large corporations to ordinary citizens.
• Sustainability and Climate Resilience
  • Sustainability occupies an important place in India’s agenda.
  • Cooperation is proposed in areas such as combating desertification, disaster management, forest-fire preparedness and sustainable aviation fuels.
  • Particularly significant is the emphasis on people-centric and community-based climate adaptation.
  • While global climate diplomacy often focuses on mitigation, developing countries also require stronger adaptation mechanisms to protect vulnerable communities and livelihoods.
  • This approach connects climate policy with human welfare and recognises that environmental resilience must be built at the community level.

BRICS and the Multipolar World Order

• BRICS increasingly represents the aspirations of countries seeking greater strategic autonomy and a more representative global order.
• For India, the grouping complements its foreign-policy objectives of strategic flexibility and multipolarity.
• However, BRICS must carefully manage its internal differences.
• Its members have divergent geopolitical interests, and excessive focus on strategic rivalry could undermine practical cooperation.
• The grouping should therefore avoid becoming dominated by geopolitical disputes that do not advance collective interests.
• Its long-term credibility will depend on concrete outcomes rather than political declarations. 

Conclusion

• The 2026 BRICS Summit provides India with an opportunity to strengthen the grouping as a platform for inclusive development, technological cooperation, climate resilience and sustainable growth.
• Its growing economic and political significance gives it considerable potential to influence the international order.
• India’s emphasis on resilience, innovation, cooperation and sustainability can give BRICS a more people-centric character.
• If members successfully convert ambitious proposals into practical outcomes, BRICS can strengthen strategic autonomy, promote development and contribute to a genuinely multipolar world order.

Context

• The 18th BRICS Summit, hosted by India in New Delhi on September 12–13, 2026, under the banner Humanity First, offers an opportunity to examine the bloc’s ambition to reshape global finance.
• BRICS seeks to challenge western dominance, reduce dependence on the U.S. dollar and create institutions that better represent developing countries.
• However, seventeen years of cooperation reveal a gap between its political rhetoric and institutional performance.
• The New Development Bank (NDB), Contingent Reserve Arrangement (CRA) and de-dollarisation agenda have not produced a genuinely independent financial architecture.

BRICS and the Quest for Financial Independence

• BRICS emerged from dissatisfaction with the unequal distribution of power in the World Bank and IMF.
• Developing countries have criticised their Western-oriented governance and financial conditions.
• The bloc responded by establishing alternative institutions and promoting local currencies to strengthen the bargaining power of emerging economies.
• Yet, genuine independence requires institutions capable of operating outside the financial structures they challenge.

The New Development Bank: An Incomplete Alternative

• Dependence on the Existing Financial System
  • The bank’s record demonstrates significant limitations. Approximately 50% of its outstanding bonds are denominated in U.S. dollars, while the Chinese yuan accounts for most of the remainder.
  • The South African rand represents only 1%. Local-currency lending stood at roughly 22% by mid-2025, below the 30% target for 2026.
  • The delayed development of a rupee-denominated bond further illustrates the difficulty of achieving financial independence.
  • The NDB also relies on Western credit-rating agencies, including S&P, Fitch and Moody’s.
  • In March 2022, it suspended operations related to Russia to protect its credit standing, revealing the influence of external financial discipline.
• Scale and Institutional Limitations
  • The NDB approved projects worth approximately $39 billion by the end of 2024, compared with around $100 billion committed annually by the World Bank Group.
  • Its co-financing with established institutions suggests that it functions as a complementary institution rather than a direct competitor.

The Contingent Reserve Arrangement: A Safety Net Without Independence

• The CRA has never been activated. Members seeking more than 30% of their allotted share must first enter into an IMF programme.
• This condition undermines its purpose of reducing dependence on the IMF.
• The absence of permanent staff, independent surveillance and a research wing further limits its effectiveness.
• The CRA therefore represents a significant political aspiration but an underdeveloped crisis-management mechanism.

De-dollarisation: Rhetoric Versus Reality

• Divergent National Interests
  • India opposes a common BRICS currency because of potential U.S. trade reprisals.
  • South Africa considers it risky, while China favours gradual yuan internationalisation. Russia has stated that BRICS has not sought to abandon the dollar.
  • The absence of de-dollarisation from the 126-point Rio declaration of 2025 reflects the bloc’s cautious official position.
  • Divergent national interests prevent BRICS from adopting a unified monetary strategy.
• The Dollar’s Continuing Influence
  • BRICS countries remain dependent on dollar-based financing and global capital markets.
  • The reported threat of additional U.S. tariffs against countries pursuing anti-American BRICS policies further demonstrated Washington’s economic influence.
  • The bloc’s lack of a collective response exposed the limits of its willingness to challenge the existing monetary order.

Reforming the IMF or Replacing It?

• BRICS declarations at the Kazan summit in 2024 and Rio summit in 2025 called for a quota-based and adequately resourced IMF.
• This seeks greater representation within the existing system rather than its replacement.
• The United States holds 16.49% of IMF voting rights, while major decisions require an 85% supermajority, giving Washington an effective veto.
• BRICS countries seek greater influence but have not demonstrated a willingness to bypass these arrangements.
• Their objective may therefore be a stronger position within the existing financial order.

India’s Leadership and the Future of BRICS

• India’s 2026 summit provides an opportunity to reassess BRICS priorities.
• Its expansion to Egypt, Ethiopia, Iran and the UAE indicates genuine interest in a more representative global order.
• However, expansion alone cannot guarantee effectiveness.
• BRICS must strengthen local-currency financing, improve the CRA’s independence and develop practical mechanisms for reducing financial vulnerabilities.
• India can promote a realistic agenda focused on financial inclusion, infrastructure and global governance reform.

Conclusion

• BRICS has successfully brought together emerging economies and challenged the legitimacy of Western dominance.
• Yet, BRICS has not created an independent global financial architecture. The NDB remains tied to dollar financing and Western credit-rating agencies, while the CRA depends on IMF-linked conditions.
• The central challenge is whether BRICS members are willing to accept the costs of genuine institutional independence.
• Until then, BRICS will remain more a platform for negotiating a better position within the existing global order than for replacing it.