BRICS

Indian Economy glossary

Also called: BRICS grouping · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT

Meaning

BRICS is a grouping of large emerging economies. It began with Brazil, Russia, India and China, South Africa joined later, and it has since expanded. Members meet at annual summits to coordinate on finance, trade, climate and positions of the Global South (developing countries). The chair rotates among members each year.

It matters because BRICS lets developing countries speak with one voice on global rules, such as opposing unilateral carbon border taxes. India held the presidency in 2026 and hosted the 18th Summit in New Delhi.

Explanation

What kind of body it is

  • It is a grouping, not a treaty organisation.
  • It has no founding charter like the WTO's Marrakesh Agreement, and no permanent secretariat.

  • Work moves through annual summits, ministerial meetings, working groups and contact groups.

  • Decisions are taken by consensus. Every member must agree, so the final text is often what everyone can accept rather than a strong commitment.

  • Its outcomes are political, not legally binding.
  • A summit produces a declaration (a joint statement of shared views and plans).

  • Cooperation is often set up through a Memorandum of Understanding (MoU). An MoU is a written agreement of intent that creates no legal duty to act.

  • The chair rotates every year. Recent chairs were Brazil (Rio summit, 2025) and India (New Delhi summit, 2026). The chair sets the agenda and hosts the summit.

Members and expansion

  • The original core: Brazil, Russia, India, China and South Africa. The name comes from their initials.
  • The expanded BRICS has added new members, such as Indonesia, Egypt, Ethiopia, Iran and the UAE.
  • Expansion brings more weight: Brazil, China, India and Indonesia alone host more than one-third of all carbon-credit projects registered worldwide.
  • It also brings more variety. Members differ widely in how mature their economies and markets are, and in their political interests, so agreeing on common rules gets harder.

Areas of work

  • Finance
  • BRICS set up the New Development Bank (NDB), which lends for infrastructure and sustainable development in emerging economies.
  • It also set up the Contingent Reserve Arrangement (CRA), a pool members can draw on when they face balance-of-payments stress (a shortage of foreign currency to pay for imports and debts).

  • Both are seen as Global South alternatives to Western-led lenders.

  • Trade and Global South positions

  • BRICS defends the multilateral, rule-based trading system of the WTO.

  • It criticises unilateral measures by rich countries. For example, it has jointly opposed unilateral Carbon Border Adjustment Mechanisms (CBAMs). A CBAM is a charge on the carbon emitted in making imported goods.

  • Climate: the BRICS Carbon Markets Partnership (BCMP)

  • The partnership rests on an MoU. The Rio summit (2025) acknowledged it, and the New Delhi Declaration (12 September 2026) reiterated the plan to implement it.
  • Its scope is capacity-building and experience-sharing only. It has no trading framework, no targets and no timeline.
  • None of the members' carbon markets is linked to another. Brazil's SBCE uses an absolute cap (cap-and-trade), while India and China use output-based intensity targets. An intensity target limits emissions per unit of output, so total emissions can still rise if output grows.

In India

  • India's BRICS presidency (2026): India hosted the 18th BRICS Summit in New Delhi on 12 September 2026, which adopted the New Delhi Declaration. The Declaration also mentions a dialogue on aligning carbon markets with adaptation goals, meaning help for people coping with climate impacts that are already happening.
  • India's carbon market, which shapes its BRICS role: India's Carbon Credit Trading Scheme (CCTS) was notified in June 2023 under the Energy Conservation (Amendment) Act 2022.
  • Emission-intensity targets have been notified for 490 entities across 9 sectors, and an offset mechanism has been opened. Offsets are credits earned by cutting emissions outside the covered sectors.

  • Draft target rules for iron and steel, cement and aluminium came out on 26 June 2026, and analysts criticised them as too weak. Weak home targets reduce India's authority when it asks BRICS partners to accept a common rulebook.

  • India's trade interest: The EU CBAM's definitive phase began on 1 January 2026. It hits India's steel and aluminium exports.

  • India objects that CBAM is unilateral, goes against CBDR-RC (common but differentiated responsibilities, under the UNFCCC), and is green protectionism (climate rules used as hidden trade barriers).

  • BRICS gives India a group platform for these objections.

  • India's broader trade stance: BRICS is a platform for coordination, not a trade deal. India's actual tariff deals are separate FTAs, such as the UAE CEPA (May 2022), EFTA TEPA (in force 1 October 2025) and UK CETA (signed 24 July 2025). India walked out of RCEP in November 2019, partly over its trade deficit with China, which is a fellow BRICS member.

Don't confuse with

  • Free trade agreement (FTA) / customs union: an FTA removes tariffs on most trade among its members, and a customs union also adds a common external tariff. BRICS has no tariff preferences, no common external tariff and no rules of origin, so it does not sit anywhere on Balassa's stages of integration.
  • RCEP (mega-regional trade agreement): RCEP is a binding trade deal with 15 members, and China is in it. India is in BRICS with China but is not in RCEP.
  • G20: the G20 includes both developed and developing economies. BRICS is made up only of emerging economies and speaks for the Global South.
  • A linked carbon market / Article 6.2 deal: a linked market (or a credit-transfer deal under Paris Agreement Article 6.2) actually trades carbon units across borders. The BRICS Carbon Markets Partnership is a non-binding MoU for capacity-building only, with no trading platform.

Prelims Hooks

  • The 18th BRICS Summit was held in New Delhi on 12 September 2026, under India's presidency.
  • The BRICS Carbon Markets Partnership MoU was acknowledged at Rio (2025) and reiterated at New Delhi (2026). It covers capacity-building and experience-sharing, not trading.
  • Trap: "BRICS member carbon markets are linked with each other." This is FALSE. None is linked.
  • Trap: "India's CCTS, like Brazil's SBCE, uses an absolute emissions cap." This is FALSE. Only Brazil's SBCE uses an absolute cap. India and China use output-based intensity targets.
  • BRICS has collectively opposed unilateral CBAMs. The EU CBAM covers iron and steel, aluminium, cement, fertilisers, hydrogen and electricity.
  • Trap: "BRICS is a free trade area with a common external tariff." This is FALSE. It is a consultative grouping that decides by consensus. Its institutional arm in finance is the New Development Bank.

Mains Points

  • BRICS as the voice of the Global South vs its internal divisions.
  • Expansion adds economic weight and gives BRICS a louder voice against unilateral measures such as CBAM.

  • But members now differ more in economic structure, market maturity and politics. Decisions need consensus, so declarations repeat promises without deadlines. The carbon partnership has moved from "acknowledged" (2025) to "reiterated" (2026) with no working framework.

  • India's balancing act inside BRICS.

  • India works with China in BRICS on climate finance and WTO issues, yet stays out of RCEP because of its trade deficit with China.

  • India also prefers to keep BRICS as a coordination forum rather than a trade bloc. Its tariff deals go through bilateral FTAs (UAE, EFTA, UK, EU).

  • A carbon-market rulebook as a policy link between GS-II and GS-III.

  • A shared rulebook could make BRICS credits more credible and help exporters show they already pay a carbon cost at home. The rulebook would set common methods for monitoring, reporting and verifying emissions (MRV).
  • Linking intensity-based markets with capped markets can weaken environmental integrity (whether each credit truly stands for one tonne less emitted).
  • So India should first tighten its own CCTS targets for steel, cement and aluminium, then agree on MRV, and only after that discuss trading.

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