Active Stocks
Thu Jul 11 2024 15:58:45
  1. Tata Steel share price
  2. 169.00 0.60%
  1. NTPC share price
  2. 377.25 -1.14%
  1. HDFC Bank share price
  2. 1,621.70 -0.28%
  1. Power Grid Corporation Of India share price
  2. 342.80 -0.95%
  1. Tata Consultancy Services share price
  2. 3,922.70 0.33%
Business News/ Opinion / Views/  We face hard options on the BRICS architecture
BackBack

We face hard options on the BRICS architecture

India must resist Beijing’s attempts to use this platform to advance its geopolitical agenda as the world turns increasingly bipolar. New Delhi should retain its space to manoeuvre

India has professed resolute neutrality in what is shaping up as another cold war between two blocs, this time with the US and Europe on one side and ‘no limit’ partners China and Russia on the other. Premium
India has professed resolute neutrality in what is shaping up as another cold war between two blocs, this time with the US and Europe on one side and ‘no limit’ partners China and Russia on the other.

The latest summit of the BRICS group of countries starts on Tuesday in South Africa, the only add-on member of what began as a quartet of Brazil, Russia, India and China, which formed the original ‘BRIC’ coined by Goldman Sachs two decades ago by clubbing together hot emerging markets for global investors to bet on. Such summitry has been a regular feature since 2009, and its most notable achievement has been the Shanghai-based New Development Bank set up by the group as a multilateral lender, an alternative to the West-led World Bank and International Monetary Fund. What’s new is the context: a geopolitical upheaval is underway in the post-Ukraine-war world. Last year’s meeting, held online, was too soon after that war’s eruption to make others sit up, though a reserve currency was proposed. This time, Western capitals are watching how BRICS may try to enlarge its role—and itself. More than 20 countries are reportedly keen to join the club amid signs of Beijing eyeing it as a platform to exert greater influence across the globe. As that is not in India’s interest, New Delhi will have to play its cards very carefully.

India has professed resolute neutrality in what is shaping up as another cold war between two blocs, this time with the US and Europe on one side and ‘no limit’ partners China and Russia on the other. Beijing has been forging ties in Southeast and West Asia, apart from Africa, as part of a grand plan, while Moscow has rattled Europe’s post-World War II equanimity. Right now, the BRICS five account for a fifth of global exports and more than a fourth of world GDP, thanks mainly to China’s presence. Even if the group’s membership is enlarged, Beijing’s dominance of it will not decline. There’s reason to suspect its heft would go up, given the list of nations ready to join. While New Delhi has been a founding BRIC member on the rationale that constructive ways could be found for rising economies to advance mutual economic interests, if BRICS takes on a decidedly geopolitical shape, which has begun to look inevitable, India could find itself in an awkward spot. Although New Delhi has been concerned about the rigid structures of multilateral institutions run by the West and also the US dollar’s grip on cross-border dealings, an alternate architecture with a Chinese blueprint could make India party to something we did not bargain for.

An anti-West position is not what India should signal even accidentally at this juncture, as New Delhi works to engage the West closer in an effort to capitalize on opportunities that arise from a rupture in Western relations with China. Our ties with Washington, especially, have grown by leaps, their logic boosted by China’s border aggression and a convergence with the US view that the Indo-Pacific must stay “free and open," an aim that alludes to the unstated risk of Chinese constraints placed on sea-lanes vital to trade. So far, India’s approach to BRICS has been to support initiatives that could yield gains for us. Now with China increasingly giving it a geopolitical hue, our path looks strewn with hard choices. A BRICS reserve currency, for example, assumes a level of trade integration we have already rejected, largely, by staying out of the China-centric Regional Comprehensive Economic Partnership. Only in a cleaved-apart zone of trade can a BRICS currency dethrone the dollar. We want neither a divided world, nor one that forces us to pick a side. We mustn’t over-invest in BRICS.

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 21 Aug 2023, 09:20 PM IST
Next Story footLogo
Recommended For You