BRICS 2026: Can an Expanded BRICS Become an Alternative Centre of Global Power?

Aspiro Living | UPSC Current Affairs | 9 min read

BRICS began as an acronym invented by a Goldman Sachs economist in 2001 to describe four fast-growing emerging economies. It has since become a formal multilateral grouping, a summit process, a development bank, a contingent reserve arrangement, and - to its most ambitious proponents - the embryo of a new multipolar world order.

With India holding the 2026 BRICS presidency, and the New Delhi summit's focus on economic cooperation, multilateral reform, and technology and trade, BRICS is more consequential than at any previous point. The New Delhi declaration deliberately avoided commitments on a common currency or BRICS Pay, per The Indian Express - a choice that tells you as much about BRICS' internal contradictions as about India's specific concerns.

The Origins and Expansion

The original BRIC grouping - Brazil, Russia, India, China - held its first formal summit in 2009 in Yekaterinburg. South Africa joined in 2010, creating BRICS. For a decade, BRICS met annually, established the New Development Bank (NDB) in 2014, and the Contingent Reserve Arrangement (CRA) in the same year, but was essentially a forum for summit communiques rather than a transformative institutional arrangement.

The 2023 Johannesburg summit changed the scale fundamentally. Six new members were invited to join: Iran, Saudi Arabia, UAE, Egypt, Ethiopia, and Argentina. Argentina subsequently declined under President Milei's administration. The remaining five joined in January 2024. Further expansion is under discussion.

The expanded BRICS now represents approximately 45 percent of the world's population, around 35 percent of global GDP at purchasing power parity, and - crucially - a very large share of the world's oil production and reserves, given the inclusion of Saudi Arabia, UAE, and Iran.

The NDB and CRA: What They Have Actually Achieved

New Development Bank

The NDB was established with an initial authorised capital of $100 billion, with each of the five original members contributing equally. It lends for infrastructure and sustainable development projects in member countries. By 2024, the NDB had approved over $30 billion in loans across more than 90 projects.

The NDB's significance is partly institutional - it is the first major multilateral development bank established without Western leadership - and partly symbolic. Its actual lending volume remains small relative to the World Bank ($100+ billion annually) or the Asian Development Bank ($40+ billion annually).

The NDB has also shown the limits of BRICS solidarity. Following the 2022 Russia invasion of Ukraine, the NDB suspended new transactions with Russia to avoid secondary sanctions exposure. This was a pragmatic decision that revealed the bank's dependence on dollar-denominated finance and Western financial infrastructure.

Contingent Reserve Arrangement

The CRA provides a framework for members to access short-term liquidity in the event of balance of payments difficulties. It has never been actually used. Its practical utility is constrained by the fact that access to the larger CRA tranche is conditional on an IMF programme - which means BRICS' alternative reserve arrangement is linked to the very institution it ostensibly provides an alternative to.

Local Currency Settlements: The Real Ambition

The most significant ongoing BRICS project - and the one India is most actively engaged in - is the push for local currency trade settlements that reduce dependence on the US dollar.

India's motivation is straightforward: dollar dependence creates currency risk, exposes India to US sanctions extraterritoriality (as seen in restrictions on Russia trade), and requires maintaining large forex reserves. The rupee-ruble trade mechanism established with Russia post-2022 sanctions was an imperfect but instructive pilot.

The New Delhi declaration's explicit refusal to commit to a common BRICS currency reflects India's position that a shared currency is neither feasible nor desirable at this stage. The macroeconomic conditions for a common currency - convergence of inflation rates, coordinated monetary policy, some form of fiscal transfer mechanism - do not exist across an economically diverse grouping that includes China, India, Brazil, and Ethiopia.

What is feasible, and what India supports, is bilateral local currency settlement agreements - trading in rupees, reais, or rands rather than dollars where the two trading parties agree. This is a different and more modest objective than a BRICS currency.

India's Position: The Internal Contradiction

India's BRICS membership involves a genuine strategic tension that honest UPSC answers must acknowledge.

India is simultaneously a BRICS member (which positions it as part of a Global South alternative to Western-led institutions) and a Quad member, a bilateral treaty ally of the United States in several domains, and a country that has closely aligned with Western positions on Ukraine. These are not easily reconciled positions.

India's approach has been to treat BRICS as a pragmatic economic and diplomatic platform rather than an ideological bloc. India uses BRICS to push for multilateral reform - UN Security Council expansion, WTO reform, reform of Bretton Woods institutions - rather than to create parallel institutions that replace the existing order.

The China factor complicates everything. China and India are simultaneously BRICS partners and active boundary disputants. The trust deficit from Galwan (2020) and the ongoing LAC situation means that any BRICS initiative where China plays the dominant role is one India approaches cautiously.

Can BRICS Become a Meaningful Alternative Pole?

The honest answer is: it depends what you mean by 'alternative pole.'

If the question is whether BRICS can create a parallel financial system that insulates members from dollar dependence and Western sanctions, the answer is no in the near term. The NDB's Russia experience showed the limits of even a BRICS institution operating outside Western financial infrastructure.

If the question is whether BRICS can give Global South countries greater bargaining power in multilateral negotiations - at the IMF, the WTO, the UNFCCC - the answer is more positive. A grouping representing 45 percent of the world's population and 35 percent of global GDP has genuine weight if it acts with some coherence.

The word 'if' is doing a lot of work in that sentence. BRICS coherence on specific issues is hard to achieve given the internal contradictions: India-China rivalry, the democratic-authoritarian mix, the oil producer-consumer divergence, the income level disparity.

Mains framing: Can BRICS evolve from an economic grouping into a meaningful alternative pole in the global order? Critically examine. A strong answer covers: the NDB and its limits, the currency question, expansion dynamics, India's internal tension, and a realistic assessment of what BRICS can and cannot achieve.

UPSC Mapping

Prelims MCQ Practice

1. The New Development Bank was established in: (a) 2012 (b) 2013 (c) 2014 (d) 2016 | Answer: (c)
2. The Contingent Reserve Arrangement's larger tranche access is conditional on: (a) BRICS consensus (b) An IMF programme (c) NDB approval (d) UN Security Council resolution | Answer: (b)
3. Which country declined to join BRICS after being invited at the 2023 Johannesburg summit? (a) Indonesia (b) Mexico (c) Argentina (d) Kazakhstan | Answer: (c)
4. The acronym BRIC was coined by: (a) The World Bank (b) Goldman Sachs (c) The IMF (d) The United Nations | Answer: (b)
5. BRICS represents approximately what share of global GDP at PPP? (a) 20% (b) 28% (c) 35% (d) 45% | Answer: (c)

Mains GS-II Question

Can BRICS evolve from an economic grouping into a meaningful alternative pole in the global order? Critically examine, with specific reference to India's strategic interests and the internal contradictions within the expanded grouping.

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