BRICS: What The Expansion Means For India

The BRICS group, consisting of Brazil, Russia, India, China, and South Africa, held their fifteenth summit at Johannesburg, South Africa, from 21-23 August.

In a landmark decision, the five countries unanimously agreed to expand the group, to include Egypt, Ethiopia, Argentina, Saudi Arabia, the United Arab Emirates, and, most significantly, Iran, as full members from January 2024.

This expansion has major geopolitical implications. It also has particular relevance to India, both in the current context, and from a historical perspective.

Ever since independence in 1947, India has sought to take its seat at the world table on its own terms.

The efforts have not always been too successful, partly because of our own squinty, strabismal, diplomacy, partly because of heavy external pressures, and partly because of global dynamics.

Our first effort was at the Afro-Asian Bandung Conference in 1955, and its follow-up Non-Aligned Movement.

It failed to achieve its objective because the groupings were too loose, many members were simply too poor at the time, and because meaningful adhesion was hindered by the Cold War. In effect, it was too premature.

A second major effort was when India became a member of the Shanghai Cooperation Organisation in 2017.

Although it was a good idea, it didn’t work for three reasons: the grouping was too China-oriented, China was insistent that India work in unison with Pakistan, and Russia, at the time, was still figuring out if its future lay with the West or the East.

A third parallel effort, ongoing for decades, has been India’s quest for a permanent membership of the United Nations Security Council.

Unfortunately, the global body is too moribund to manage this necessary reform, not least because of China’s ever-ready veto blocking India’s ascendancy.

But BRICS suits India very well — geographically, commercially, and geopolitically, and to understand the intricacies of this expansion, plus its many implications, we have to go beyond clichés like the ‘Global South’, or a superficial assessment that BRICS was formed with some sort of confrontational intent, to ‘challenge the western geopolitical view’.

No, the interests of the BRICS member countries are not so closely attuned for that to be true.

Instead, let us first look at what the BRICS is not, after its first expansion. It does not have any members from four regions — North America, Europe, Central Asia, or the Far East (barring China, of course).

It has no members from ASEAN (Association of Southeast Asian Nations), or NATO (North Atlantic Treaty Organization), the European Union, or OECD (Organisation for Economic Co-operation and Development). Note, pertinently, that the OECD includes Chile, Australia, Japan, and Israel.

It means that BRICS represents those countries who have traditionally kept out of, or have been kept out of, groupings which arose in the wake of the Second World War, and evolved during the Cold War.

So, what exactly are the implications of this expansion?

First, BRICS now has the largest producers and consumers of hydrocarbons sitting at the same table. It will be interesting to see what currencies they use in their energy trade. Here is how they stack up against the developed world (essentially, the OECD):

Second, BRICS is a group being shaped by India in active association with three types of countries: former colonies (Egypt, Ethiopia, South Africa, Brazil, Argentina, China), the neo-colonised (Saudi Arabia and the Emirates have both been under American influence since long, and host Western military bases), and countries ostracised by the West (Iran, Russia, and China).

Third, the absence of Pakistan in BRICS gives India the requisite elbow room to deal with China in an atmosphere which is both isolated from subcontinental dynamics, and is driven by a very different set of motivations which have no direct bearing on.

Pakistan will remain a sticking point, by virtue of its strategic and military significance to China, as will the current restrictions on the laying of pipelines and railways lines between Iran and India along the Makaran Coast. But that is an issue which will be tackled separately from BRICS by India.

Fourth, an expansion of BRICS ties in neatly with India’s growing role in the other major group it is active in — the G20.

The West, ASEAN, and Japan are members of G20, which means that India is finally getting to decide how it will engage with the world — a journey which was fraught with hurdles, constricting compromises, and conflicts of domestic, regional, and international interests from the 1955 conference in Bandung.

Also, Pakistan is not a member of G20, so again we see that India is defining its global interactions independent of its regional issues.

Fifth, this expansion of BRICS is one more step towards ending the enforced isolation of Iran. The implications are geopolitical and of specific interest to India, since Iran is a neighbour for all practical purposes.

A hint of things to come was offered by the leaders of the two nations when they met in Johannesburg: a fast-tracking of Chabahar Port in Iran, which is an important link in a new multi-modal trade route spanning Russia, Iran and India — the International North-South Transport Corridor; increased bilateral trade and investment; energy; greater connectivity; and the countering of terrorism.

The Americans will obviously be upset, but this is where India’s ability to leverage the size of its market as a tool of diplomacy comes in.

Sixth, Argentina’s membership means that by far the two largest economies in Latin America are now both in BRICS. It is the fourth largest producer of lithium in the world.

Further, the bulk of Argentina’s imports are manufactured goods, hydrocarbons, pharmaceuticals, and textiles, all of which are fresh opportunities for Indian business.

Seventh, likewise, a sizeable portion of Egypt’s imports are pharmaceuticals and food grains, which present an opportunity for Indian business.

Eight is Ethiopia the second most populous nation in Africa, and one of the continent’s fastest-growing economies. It is an intriguing inclusion into BRICS, because it is a poor land-locked country.

One plausible view is that Ethiopia could be developed as a new, secure gateway, through the Rift Valley, to the tremendous mineral wealth abounding in the countries to its west and south.

Another allied, geopolitical possibility is that with Egypt and Ethiopia on one side, and Saudi Arabia on the other, the Red Sea and the Gulf of Aden are being secured.

Either way, in conclusion, this BRICS expansion will benefit India. Whether it will also aid in improving Sino-Indian ties through the pressure of commercial profit remains to be seen.

Nonetheless, it is a reiteration of our worldview, that most of what we need is found in the Indian Ocean Region; and, that most of the markets we can presently access competitively, and fairly, are in Eurasia.

In that sense, the expansion can be viewed as a precursor to the African Union joining G20.

This is the reality which BRICS reflects: that global trade has already moved East; that India’s dependency on Western markets, and our interest in them, is probably on the cusp of a long, centennial wane.