BRICS in a fragmented world order, a test of relevance

1. At a Glance

• BRICS is now an 11-member grouping of major emerging economies. India chaired it in 2026 and hosted the 18th Summit in New Delhi on 12–13 September 2026 [1][3].
• The New Delhi Declaration was adopted unanimously. That counts as a diplomatic win, because the enlarged bloc has members with very different views and often works at cross purposes [1][4].
• Core tension: BRICS agrees on the need to reform global governance (UN, IMF/World Bank), but it faces internal tensions and imbalances, so its relevance in a fragmented world order is open to question [1].
• Why it matters for UPSC: it touches India's Global South leadership, its multi-alignment strategy, de-dollarisation and payment-system debates, and UNSC reform. These map to GS-II (IR) and GS-III (economy).

2. Why in the News

• India hosted the XVIII BRICS Summit, New Delhi, 12–13 Sept 2026, at Bharat Mandapam, Pragati Maidan [3][5].
• The New Delhi Declaration was adopted unanimously. PM Modi said UNSC reform "can no longer wait" and called for changes in voting power and leadership positions in global financial institutions [4].
• An op-ed by M.K. Narayanan (former NSA and former Director, IB) in The Hindu, 10 Oct 2026, called the summit a test of BRICS' relevance amid internal imbalances [1].
• A GTRI analysis said the Declaration balances concerns on tariffs, sanctions and West Asia [7].

3. Background & Evolution

• Founding rationale: a platform for emerging economies to press for a more representative international order, built on the view that global institutions no longer reflect contemporary economic and demographic realities [1].
• Expansion: the grouping grew from five original members to 11 [3].
• 2026: this was India's fourth BRICS Chairship [3][5].
• Institutional arm: the New Development Bank (NDB). Russia hosted the 11th NDB Annual Meeting in Moscow, 14–15 May 2026, as Chair of the NDB Board of Governors [3].
• Standard background, not verified in the retrieved sources (check against MEA before use): the BRIC acronym dates from 2001 (Goldman Sachs); the first leaders' summit was at Yekaterinburg in 2009; South Africa joined in 2010–11; the NDB and the Contingent Reserve Arrangement (CRA) were agreed at Fortaleza in 2014; NDB headquarters is in Shanghai.

4. Core Static Facts

5. Multi-Dimensional Analysis

Geopolitical / Strategic

• India got consensus from a diverse 11-member bloc, which shows its standing in BRICS and in world councils more broadly [1].
• The Declaration supports de-escalation in West Asia and humanitarian access in Gaza [1]. It manages to balance member positions on sanctions and the region [7].
• An India–China bilateral meeting was on the summit agenda, so the summit also served as a venue for managing bilateral ties [9].
• Despite the consensus text, internal tensions and imbalances remain, which raises the question of whether BRICS has a coherent purpose [1].

Economic

• The Declaration pushes local-currency trade and interoperable cross-border payment systems [1].
• It backs the BRICS Economic Partnership Strategy 2030 and a Global Value Chain Action Plan 2026–2030 [1].
• It addresses tariff and trade-policy concerns in a period of unilateral trade measures [7].

Global Governance / Institutional

• It calls for a more representative UN and an international financial system that gives developing countries more weight [1].
• Modi pressed for UNSC reform and changes in voting power at global financial institutions [4].

Scientific / Technological

• Members committed to implementing a joint statement on AI governance [3][8].
• The Declaration welcomed a startup incubator network and floated a proposed innovation fund [6][8].

Sectoral breadth

• The Declaration covers trade, finance, energy, climate, technology, health and agriculture [1].

6. Recent Developments (last 12–18 months)

• 14–15 May 2026: 11th NDB Annual Meeting, Moscow (Russia chaired the Board of Governors) [3].
• 2026: India's year-long Chairship under the "Resilience, Innovation, Cooperation, Sustainability" theme [5].
• 12–13 Sept 2026: 18th Summit in New Delhi; Declaration adopted unanimously [2][4].
• Sept 2026: AI governance joint statement, startup incubator network and innovation fund proposal [6][8].
• Sept 2026: BRICS–NDB Knowledge Portal launched [3].
• 10 Oct 2026: M.K. Narayanan's op-ed questions BRICS' relevance despite the consensus [1].

7. Prelims Hooks

• The 18th BRICS Summit was held in New Delhi, 12–13 September 2026 [3].
• Summit venue: Bharat Mandapam, Pragati Maidan [3][5].
• 2026 was India's fourth BRICS Chairship [3][5].
• The 2026 theme spells out BRICS: Building for Resilience, Innovation, Cooperation and Sustainability [2].
• BRICS currently has 11 members [1][3].
• The New Delhi Declaration was adopted unanimously [4].
• The Declaration supports the BRICS Economic Partnership Strategy 2030 [1].
• It adopted a Global Value Chain Action Plan for 2026–2030 [1].
• It promotes local-currency trade and interoperable cross-border payment systems [1].
• The 11th NDB Annual Meeting was held in Moscow in May 2026 [3].
• The BRICS–NDB Knowledge Portal was launched under India's Chairship [3].
• The summit produced a joint statement on AI governance [3][8].
• The Declaration welcomed a BRICS startup incubator network [6].

8. Why a Bigger BRICS Agrees More Easily but Delivers Less

• The unanimous vote was easy because of the consensus rule itself
• The Declaration works by consensus (every member must agree) [1]. In practice, any one of 11 members can block a line.
• So the final text keeps only what nobody objects to. It covers trade, finance, energy, climate, technology, health and agriculture [1]. A text that wide usually carries few binding commitments.

• This is why Narayanan calls the summit a test of relevance, not a success, even after the unanimous vote [1].

• Members agree on reforming other people's institutions, not on paying costs themselves

• Asking the UN, IMF and World Bank to change costs BRICS members nothing. Everyone signs.

• The harder questions are about each other: trade imbalances, supply chains, rival seats. These stay out of the text.

• UNSC reform shows the gap clearly

• PM Modi said UNSC reform 'can no longer wait' [4].

• But China and Russia already hold permanent seats (UN Charter, Article 23). They gain nothing from adding new permanent members, so a shared BRICS call does not mean shared support for India's own seat.

• India and China still need a separate meeting to manage their own ties

• An India–China bilateral meeting was on the summit agenda [9].
• When two founding members must handle their relationship outside the group's main work, the group cannot act as one bloc on hard security issues.

9. Why India Says 'Local Currency' but Avoids 'De-dollarisation'

• India is careful about words because the US has threatened tariffs
• De-dollarisation means reducing the use of the US dollar for trade, reserves and payments [12].
• Donald Trump threatened 100% tariffs on BRICS countries if they try to replace the dollar [10]. He also said 'Brics is dead' [16].

• The US is a market India cannot lose. So India pushes the practical tool (local-currency trade) and rejects the political label.

• India's official line is clear

• MEA said de-dollarisation is 'not part of India's financial agenda' [11].

• Jaishankar said India does not want to replace the dollar. It only wants 'workarounds' to protect its trade, and there is no proposal for a BRICS currency [12].

• Local-currency trade has a built-in limit

• It works only when two countries buy roughly the same amount from each other.
• If one side sells far more, it ends up holding a lot of the other's currency with little to spend it on. Then it asks for dollars again.

• This is why the Declaration speaks of interoperable payment systems (national payment networks that can connect to each other) and not a common currency [1].

• Washington does not see the rupee as a threat

• US Treasury Secretary Bessent said he is 'not worried' about the rupee becoming a reserve currency (a currency other countries hold as savings) [19].
• So India's approach so far reduces risk for India without directly challenging the dollar.

10. BRICS Opposes Western Sanctions, but Its Own Bank Obeys Them

• The Declaration criticises sanctions the West imposes
• It condemns unilateral and secondary sanctions [7]. Secondary sanctions mean penalties on third countries that do business with the sanctioned country.

• The language appears aimed at US and European sanctions on Russia and Iran [7].

• The New Development Bank (NDB) did the opposite in practice

• Days after Russia invaded Ukraine, the NDB stopped funding new projects in Russia, a founding member [13].
• It did this to assure investors that it followed Western-led sanctions [13].

• Its head later said it was still not considering new Russian projects, because it follows restrictions in financial and capital markets [14].

• Why this happens

• The NDB raises money by borrowing from global investors, and much of that system runs on the dollar.

• If the bank breaks Western sanctions, it risks losing access to that money. So BRICS' own 'alternative' bank still depends on the system BRICS wants to reform.

• Russia now wants new tools that sanctions cannot reach

• At the 2026 summit, Putin proposed a new insurance mechanism for BRICS [15]. He praised the NDB, saying it handles projects worth $140 billion [15].
• India must weigh this. Joining tools built to bypass sanctions could expose Indian banks and firms to US secondary sanctions.

11. The Case That BRICS Is Only Talk, and Why India Still Stays

• The strongest argument against BRICS
• Summits produce long declarations but few results. A Business Standard editorial called the 2026 meeting 'Showy summitry' [18].
• Its bank cannot help a sanctioned member [13]. Its members disagree on the dollar [11][12]. Two of them, India and China, are strategic rivals [9].

• Expansion to 11 members [3] added more voices, which makes agreement on hard issues even harder [1].

• What is right in this criticism

• Delivery is weak. Plans like the Economic Partnership Strategy 2030 and the GVC Action Plan [1] are plans, not results. They need to be judged later on actual numbers.

• BRICS has not yet changed IMF voting shares or the UNSC.

• Why staying in still makes sense for India

• The consensus rule protects India too. India can block text that turns BRICS into an anti-Western bloc. GTRI found the 2026 text balanced on tariffs, sanctions and West Asia [7], which suits India's multi-alignment (keeping good ties with all major powers at once).
• It gives India a seat at the same table as China. If India left, China would shape the Global South agenda inside BRICS alone.
• It adds weight to India's reform demands. India's call for changes in IMF and World Bank voting power [4] sounds stronger when 11 emerging economies sign it.

12. What India Should Push Next Inside BRICS

• MEA should keep payment work technical, not political
• India already settles some trade in local currencies with Russia, the UAE and the Maldives [12].

• Linking payment networks (the 'interoperable payment systems' in the Declaration [1]) cuts conversion costs, and does not trigger the US tariff threat aimed at replacing the dollar [10][11].

• Use the Global Value Chain Action Plan to reduce dependence on any single member

• At the summit, PM Modi warned that using technology and critical minerals as weapons can hold back progress [17].

• The GVC Action Plan 2026–2030 [1] should be used to spread supply chains across several members. Otherwise, one partner could still use supply as pressure, even inside BRICS.

• Measure the Economic Partnership Strategy 2030 by outcomes

• The strategy is backed in the Declaration [1]. India should push for clear yearly targets (for example, the share of intra-BRICS trade settled in local currency).

• Without numbers, the next summit cannot show whether anything changed.

• Push the NDB to use what India built during its Chairship

• The BRICS–NDB Knowledge Portal was launched under India's Chairship [3].
• India can use it to help lending go to projects in member countries that sanctions do not touch. This keeps the bank useful while it stays out of Russia [14].

13. Anchors for Answers

• Data: BRICS grew from 5 to 11 members [3]. Putin says the NDB handles projects worth $140 billion [15]. Trump threatened 100% tariffs if BRICS replaces the dollar [10].
• Report/Committee: BRICS Economic Partnership Strategy 2030 and Global Value Chain Action Plan 2026–2030, both backed in the New Delhi Declaration [1].
• Law/Case: UN Charter, Article 23: names the five permanent UNSC members, including BRICS members China and Russia.
• Comparison: The NDB stopped new projects in Russia to follow Western sanctions [13], even though BRICS declarations condemn unilateral sanctions [7].
• Scheme: India's local-currency trade settlement arrangements with Russia, the UAE and the Maldives: a working example of 'workarounds' without de-dollarisation [12].

14. Mains Relevance

• GS-II: bilateral, regional and global groupings and agreements involving India or affecting its interests; important international institutions and their structure and mandate.
• GS-III: the Indian economy and external sector (payment systems, trade, value chains).
• Possible question stems: 1. "Expansion has widened BRICS' reach but diluted its coherence." Critically examine with reference to the 2026 New Delhi Summit. 2. In a fragmented world order, how can India use BRICS to advance Global South interests while balancing its ties with the West? (15 marks) 3. Discuss how relevant BRICS initiatives on local-currency trade and cross-border payments are to the reform of the international financial architecture.

15. Related Topics to Study Next

• New Development Bank and Contingent Reserve Arrangement: BRICS' institutional financial arms.
• UNSC reform and G4: a central demand in the Declaration [4].
• G20 and India's Global South agenda (Voice of Global South Summits): overlapping reform agenda.
• SCO: another non-Western grouping where India–China–Russia dynamics play out.
• De-dollarisation and rupee internationalisation (UPI and cross-border links): connects to the payment-interoperability push [1].
• India–China relations: a bilateral meeting was held on the summit sidelines [9].
• West Asia conflict and Gaza: both feature in the Declaration [1].
• Global AI governance: links to the BRICS AI joint statement [8].

16. NCERT Concepts to Revise

• De-dollarisation (Economy): BRICS pushes local-currency trade and payment interoperability, which is the core of reducing dependence on the US dollar.
• Payment system (Economy): The Declaration backs interoperable cross-border payment systems, so you need to know how payment clearing and settlement work.
• Rupee internationalisation (Economy): India's local-currency trade push links directly to settling more cross-border trade in rupees.
• International Monetary Fund (History): Modi and BRICS demand changes in voting power at the IMF, where Western powers hold effective control.
• World Bank (History): BRICS calls for reforming the Bretton Woods institutions so developing countries get more weight and leadership roles.
• Global value chain (Geography): The Declaration adopts a Global Value Chain Action Plan 2026–2030, so you should know how production is split across countries.

17. Common Errors / Trap Areas

• Chairship count: 2026 was India's fourth Chairship, not its third [3].
• Summit number: New Delhi 2026 was the 18th summit (XVIII) [2].
• NDB meeting venue: the 2026 NDB Annual Meeting was in Moscow, not New Delhi, even though India chaired BRICS that year [3].
• Membership count: the grouping is 11 members [1]. Check the current list on MEA, because the status of some invitees (e.g., Saudi Arabia) has been ambiguous; don't assume every invitee joined.
• "Common currency" trap: the Declaration promotes local-currency trade and payment interoperability, not a single BRICS currency [1].