Prime Minister Narendra Modi missed being physically present with the scientists of ISRO when India’s Chandrayaan 3 ‘soft landed’ on the moon, because he was then attending the BRICS conference in Johannesburg. He however made a virtual presence with a flag in hand to congratulate the ISRO scientists for their historic achievement. But his presence at BRICS conference was also important because the organization was increasingly becoming more and more important geopolitically. His meeting in the wings with the Chinese Premier is expected to play a significant role in ‘disengagement and de-escalation’ of Indian and Chinese troops on the Ladakh border.
Significantly, the five members of BRICS - Brazil, Russia, India, China and South Africa – expanded themselves in this meeting to an eleven member family adding six more members: Argentina, Ethiopia, Egypt, Saudi Arabia, UAE and Iran. BRICS now looks stronger; the infusion of new blood will certainly make an impact in the world politics. Already, observers say the increasing influence of China is quite evident, especially with the induction of Argentina and Ethiopia who are direct recipient of Chinese assistance. Iran is under the sanctions of the US; so the moves of the anti-US lobby in the organisation will be something to watch in the future.
World trade is expected to take a new turn with the New Development Bank based in Shanghai promising to help the BRICs members to trade among themselves in their own currencies. This is a big step in an attempt to create an alternative payment system in trade which now happens mostly through the dollar. This is one step away from
what one might say the European Union did for the European countries: freedom from a trade bound to the dollar. The BRICS countries being given the freedom to trade among themselves through their own currencies means further weakening of the dollar in the world market.
However, India’s present trade equations with the BRICS members, both with the old and the new, is a matter of concern. India’s trade deficit with China is huge; so it is with Russia and South Africa. With Brazil, Indian exports are slightly higher than its imports. But now with the addition of UAE and Saudi Arabia in the family, India’s trade deficit with BRICS countries will really look intimidating. The figures in trade deficit especially with the mideastern countries are fearful mainly because of the oil imports.
It is expected that with the introduction of trade among the member countries through their own currencies, things will improve. Putin, who attended BRICS meeting virtually, said Russia will invest more in Africa. China is already investing greatly in the African countries. India needs to pull up its socks. Africa has huge potential for trade. China has already made a head start in the form of development aid. Russia is about to enter. Now with the alternative currency payment system opening up, India needs to cash in. Till so far, Indian export efforts have been poor in Africa. Some of the private firms from India are trying to explore mining possibilities in
Africa. Gujaratis in Africa have a traditional stronghold, especially in the eastern African countries, in the field of finance. This can certainly be given a push by the Indian government in the changing scenario where the alternative payment systems are opening up.
The addition of Argentina from Latin America in BRICS opens up newer opportunities. It’s a country full of resources. But unfortunately trade with Argentina so far has been mainly ‘one-sided’ imports. The newly expanded BRICS platform, with trade opportunities in currencies of member countries, is a call for India to quickly overcome its trade deficits.