Opinion: India’s strategic move at BRICS
Kazan Summit reflects the bloc’s aim to challenge West-driven financial hegemony by promoting a multipolar world order
By Sanjay Turi
Constituting more than 40% of the world’s population and over 25% of its GDP directly coming from emerging economies, BRICS has gradually grown into one of the most influential alliances in the world to challenge the current global financial hegemony. The recently-held BRICS Summit, 2024, concentrated on the increasing calls for a multipolar global order and a more decentralised and balanced monetary system in terms of de-dollarisation. This aligns with BRICS’ primary goal of reshaping international governance frameworks to counter US hegemony.
The BRICS summit in Kazan featured in-depth discussions aimed at reducing the reliance of its member countries on Western financial institutions and increasing the economic self-sufficiency of each member. Attendees emphasised the need to encourage bilateral and multilateral trade in local currencies, which is a critical step in re-establishing a strong financial framework that protects member countries from the negative effects of sanctions and currency volatility caused by external factors.
UPI Collaborations
India highlighted its Unified Payment Initiative (UPI), which is being adopted by several nations across the world such as France, the United Arab Emirates, Malaysia, Singapore, Bhutan and Sri Lanka. The projection of rapid success of UPI services in India was intended towards grabbing the attention of BRICS member countries to think about India’s proposal of a decentralised BRICS payment system.
The BRICS payment system, proposed by India, was an important takeaway from the Kazan meeting. This strategic effort of India proposes a comprehensive and independent structure that promotes trade among BRICS nations without heavily relying on the US currency or traditional Western banking institutions, aiming to empower the bloc’s economy and exponentially strengthen their global competitiveness.
Experts in this region believe that India has played smartly in using its growing economic strength and geostrategic ties to oppose China’s growing influence with the BRICS coalition. By advocating the BRICS payment system, India aims to attract nations both within and beyond the group seeking greater financial independence from the economic domination of the US and China. The ongoing multilateral talks within the bloc show India’s complicated balancing act, as it now safely plays both a cooperative and competitive role with China.
Through active diplomatic engagement, India tries to underscore its commitment to the BRICS’ overarching goals while also seeking to counter China’s efforts to impose its financial dominance over the alliance. This nuanced and deliberate approach of India reflects its diplomatic commitment to protecting its strategic interests in a rapidly evolving geopolitical landscape, in addition to encouraging cooperation among member states within the bloc.
Payment System
As China is not supportive of the view that India would introduce any proposal potentially challenging the former’s unilateral dominance in the bloc, it formally did not welcome this initiative. China is well aware of the fact that the BRICS payment system would encourage each member nation to conduct transactions in its own currency, preventing yuan from controlling the bloc while also ignoring China’s ambitions to become an alternative to the US dollar in the long run.
The BRICS payment system will certainly help reduce China’s influence over other members. It primarily focuses on creating a shared and decentralised financial system that allows each member country of the bloc to be financially more independent, rather than heavily relying on China’s financial debt trap network.
India’s advocacy for the payment system undoubtedly improves its soft power within BRICS and solidifies its position as a leader among developing economies aiming for economic sustainability in the region. This idea is seen by member nations as a sincere effort to balance power within the bloc. As none of the members wanted China to exert excessive dominance, they wholeheartedly welcomed India’s proposal of establishing a decentralised payment system.
In light of Indo-Chinese rivalry and China’s debt trap policy, it is quite probable that the countries outside the block will also acknowledge this initiative. Therefore, it can be concluded that India’s proposal of creating a BRICS payment system is a significant victory in its strategy to counter China’s influence under the Belt and Road Initiative (BRI). If implemented, this will change the global financial landscape significantly and facilitate increased trade between India and other BRICS nations without any dollar-driven financial barriers.
India’s advocacy for BRICS payment system solidifies its position as a leader among developing economies
Space Research
India’s other strategic milestone of this meeting was the collaboration with Russia on space research. Russia has teamed up with India to work on the Space Exploration Consortium while China is working on the International Lunar Research Station on its own. Since Russia views itself as superior to China in the field of space exploration, it rejected China’s initial offer to join this project as a subordinate member. Russia used to be a leader in space exploration and it still has a big impact on science and technology.
The major strategic advantage of India here, however, is that India has been able to strengthen its relationship with Russia in countering China’s dominance in Space R&D. Russia and India are determined to launch a small modular reactor on the surface of the Moon before China does. In this context, India is benefiting from the hidden rivalry between China and Russia, gradually strengthening its position in the sphere of space research and development.
The third major geopolitical outcome of the Kazan Summit is the effective and formal admission of Ethiopia into the Block, which has historically been considered an adversary of Djibouti and Eritrea. Keeping in mind that Djibouti and Eritrea, which have a very good relation with China, host naval bases for China and other Western countries, it was India which first proposed the inclusion of Ethiopia in the BRICS.
India can now compete with China’s extensive investments and diplomatic outreach under the BRI by expanding its engagement in Ethiopia, one of Africa’s fastest-growing economies and a major geopolitical player in the Horn of Africa. Due to Ethiopia’s historical adversity with Djibouti and Eritrea, its membership in BRICS would represent a significant strategic advantage for India within the alliance.
India has welcomed Ethiopia into BRICS, much like China did when it admitted Pakistan to the Shanghai Cooperation Organization (SCO). The inclusion of Ethiopia in the BRICS bloc could give India a strategic advantage in countering China by drawing attention to its internal disputes with China-backed Djibouti and Eritrea within the group, much like Pakistan plays a crucial role for China in opposing India within the SCO bloc.
Overall, this BRICS meeting can be perceived as a strategic win for India over China as well as Western countries from the perspective of international geopolitics.
(The author is Doctoral Candidate, Centre for West Asian Studies [CWAS], School of International Studies, Jawaharlal Nehru University, New Delhi)
