Trade, bridging gaps between Iran and UAE: Brics Summit to be a delicate balancing act for India

India is chairing the 18th Brics Summit at a time when the international community has been roiled by the economic fallout of the wars in West Asia and Ukraine.

From ensuring that trade-related initiatives are not perceived as anti-West to bridging differences between member states on the West Asia conflict, the Brics Summit being hosted by India this weekend is expected to be a series of delicate balancing acts, as New Delhi takes forward its agenda of global governance reforms and focusing on the pressing issues of the Global South.

India is chairing the 18th Brics Summit at a time when the international community has been roiled by the economic fallout of the wars in West Asia and Ukraine, which in turn have led to the members of the grouping devoting greater attention to measures to address supply chain disruptions and the uncertainty on the global stage.

BRICS Summit theme and 2-day schedule

The theme for this year’s summit is “Building for resilience, innovation, cooperation and sustainability”, with the Indian side describing these four pillars as crucial for strengthening economic and institutional resilience to navigate global uncertainties, and deepening multilateral engagement through development finance, trade facilitation and global governance reforms.

Leaders of the member states — India, Brazil, Russia, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates (UAE) — will gather for a closed session on the theme of “Inclusive global governance and strengthening multilateralism” on the first day of the summit on September 12. While Saudi Arabia was made a full member in January 2024, it has yet to participate in summits in this capacity.

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The second day will be devoted to the outreach session that will include partner countries Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan and Vietnam, with discussions on the theme of “Resilience, innovation, cooperation and sustainability: Shaping the future for inclusive global growth”.

The Indian side perceives Brics as a platform that complements its membership of other forums such as the G20, Shanghai Cooperation Organisation (SCO) and Quad, allowing it to work with a diverse range of partners to address a range of political, security and economic issues at a time of growing geopolitical and geo-economic turbulence and uncertainty. This also dovetails with New Delhi’s policies of strategic autonomy and multi-alignment, without excessive dependence on any one grouping or bloc.

“Our approach is to bridge differences and bring people together to find solutions to global issues at a time of increased fragmentation,” said an official who declined to be identified. “At the same time, the focus is on the Global South, especially problems faced by developing countries in the context of food, fuel and fertiliser security because of various conflicts.”

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Economic cooperation challenges

But all of these initiatives will require complicated balancing acts. In the field of economic and commercial cooperation, the Indian side will have to ensure that all measures taken by Brics do not run afoul of US President Donald Trump, who has often railed against Brics, claiming it is a platform supporting de-dollarisation and working against the interests of the US.

India has consistently maintained that it is not in favour of any “Brics currency” as it works to enhance trade settlements in national currencies with Brics members, as well as trade diversification and de-risking of supply chains with members of the grouping. However, even in trade settlements in national currencies, India has concerns about the possible dominance of the Chinese yuan.

Experts have also pointed to the imbalance in India’s trade with Brics states — members of the grouping supply 42% of India’s imports, with China alone accounting for a major share, but procure only 22% of the country’s exports. While India’s trade with Brics members more than doubled from $203 billion in FY2021 to $417.5 billion in FY2026, its deficit tripled from $74.5 billion to $226 billion in the same period.

Ajay Srivastava of the economic think tank Global Trade Research Initiative (GTRI), said: “China dominates the grouping, exporting $550.8 billion to other Brics members. India, meanwhile, records the bloc’s largest trade deficit among Brics members.”