BRICS: expansion, the NDB and India's balancing act

Few groupings illustrate the shift in global power as neatly as Brazil, Russia, India, China and South Africa (BRICS). Born in 2001 as a Wall Street acronym for four fast-growing economies, it became a diplomatic forum in 2006, held its first leaders’ summit at Yekaterinburg in 2009, added South Africa in 2011, and then, in 2024-25, nearly doubled its membership. With new members including Egypt, Ethiopia, Iran, the UAE and Indonesia, the bloc now claims roughly two-fifths of global GDP and about half the world’s population, surpassing the G7 on the GDP measure.

For UPSC, BRICS is a case study in three syllabus themes at once: reform of global governance, development finance outside Bretton Woods institutions, and India’s multi-alignment. This article covers the expansion, the New Development Bank, the de-dollarisation debate, and the delicate balancing act India must perform as it takes the chair in 2026.

From an acronym to a bloc

The idea began as an investment thesis: Brazil, Russia, India and China were the large emerging economies that would reshape the 21st-century economy. The forum formalised in 2006 on the sidelines of a G8 outreach meeting, held its first summit in 2009, and became BRICS when South Africa joined the summit process in 2011. The decisive institutional step came in 2014-15, when the Fortaleza summit created two financial institutions: the New Development Bank for project finance and the Contingent Reserve Arrangement as a liquidity backstop. The message was explicit: emerging economies would build their own financial architecture rather than wait for the IMF and World Bank to reform.

For a decade the grouping stayed at five, which made consensus manageable but limited its claim to represent the Global South. The 2023 Johannesburg summit broke the logjam by agreeing to enlargement, and the 2024-25 intake followed. Brazil chaired the grouping in 2025 under the theme of strengthening Global South cooperation for inclusive and sustainable governance, culminating in the Rio summit of July 2025.

The name itself is exam trivia with a point: BRIC began as an acronym, not a bloc. Goldman Sachs economist Jim O'Neill coined 'BRIC' in 2001 for four large emerging economies; it only became BRICS, a real grouping, with South Africa's admission in 2010.

The expansion: bigger, heavier, harder to steer

The new intake is strategically coherent: Egypt, Ethiopia, Iran and the UAE joined in 2024, and Indonesia followed as a full member in 2025, bringing the count to eleven members plus a reported ten partner countries. The energy arithmetic changed overnight: with major oil producers among the new members and partners, the bloc is reported to account for around 44 per cent of global crude oil output. Demographically and economically, the enlarged bloc strengthens its claim to speak for the developing world.

But size has a cost. More members mean more veto points and a harder time defining common purpose; China’s economic scale creates institutional asymmetry that smaller members watch warily; and conflicts spilling in from Ukraine and West Asia distract from development cooperation. India’s stated preference is for expansion with cohesion: broader representation without turning the forum into an anti-Western bloc or a replacement for universal institutions.

The NDB: development finance outside Bretton Woods

The New Development Bank is BRICS’ most concrete achievement. Set up in 2014 with an initial authorised capital of US$100 billion and headquartered in Shanghai, it finances infrastructure and sustainable development in emerging economies, from renewable energy to urban transport. Its governance is its selling point: unlike the IMF and World Bank, voting power is shared equally among founding members rather than weighted by shareholding, which is why it is presented as a democratic alternative to Western-led lenders.

The record is mixed, and answers should say so. The bank has approved billions in projects, with India among the largest borrowers: one account puts NDB project exposure in India at roughly US$6.9 billion across urban and energy sectors, including a reported US$490 million loan for a Madhya Pradesh highways project. New members such as Bangladesh, the UAE, Egypt and Algeria have widened its shareholder base. But the bank faces real constraints: raising funds on international markets, sanctions exposure through some borrowers, and a thin project pipeline relative to the World Bank. The CRA, a US$100 billion liquidity arrangement, is symbolically important as an IMF alternative but has never been the bloc’s workhorse.

The de-dollarisation debate

Few BRICS topics generate more heat than the idea of reducing dollar dependence. The actual agenda is more modest than the headlines: local-currency trade settlement between members, as in India-Russia rupee-ruble arrangements, rupee-dirham payment channels, and the BRICS Pay proposal for interlinked national payment systems. India’s position is cautious and consistent: support financial resilience and local-currency mechanisms, but oppose any common BRICS currency, which would require monetary integration across wildly different economies that neither India nor others want.

India's 2026 presidency: the agenda

India assumes the BRICS chair in 2026 after Brazil’s 2025 term, with the leaders’ summit expected in New Delhi. The reported presidency themes, resilience, innovation, cooperation and sustainability, suggest Delhi wants a practical, delivery-focused year: limiting the agenda to a few implementable priorities, converting declarations into named projects with financing plans, strengthening working-group follow-up, and consulting smaller developing countries so enlargement does not create another exclusive club.

The political challenge is the one Delhi has managed since 2009: use BRICS for multipolarity, development finance and Global South voice while resisting Chinese dominance over the agenda and any drift toward a geopolitical counter-bloc. India’s simultaneous membership of the Quad and the SCO is the proof of concept: issue-based coalitions, not exclusive blocs. The presidency will be judged on whether expansion translates into delivery, project pipelines, NDB lending growth and real payment-system linkages, rather than longer declarations.

What examiners keep asking

• The standard evolution answer runs: 2001 concept, 2006 formalisation, 2009 first summit, 2011 South Africa, 2014 NDB/CRA, 2024-25 enlargement.
• NDB versus AIIB is a ready-made comparison: BRICS-founded with equal voting versus China-led with shareholding-weighted votes.
• India’s BRICS line is always "reform-oriented, not anti-West": cite the equal-voting NDB, local-currency caution, and the Quad-SCO-BRICS simultaneity as evidence.

Rio 2025 and the tariff shock

The 17th BRICS Summit, held in Rio de Janeiro on 6-7 July 2025, was the first hosted by Brazil since the grouping's expansion and the first summit Indonesia attended as a full member. The Rio de Janeiro Declaration, running to 31 points and 126 commitments, covered the familiar BRICS agenda: reform of global governance, development finance, climate action, health and digital cooperation. India came with four specific proposals: demand-driven financing by the New Development Bank, a BRICS Science and Research repository, resilient critical minerals supply chains, and cooperation on responsible artificial intelligence. The summit backed India's bid to host COP33 in 2028, a notable diplomatic win.

Two new BRICS instruments were launched at Rio. The BRICS Carbon Market Partnership (via a framework MOU) deepens cooperation on carbon markets, a direct response to the EU's Carbon Border Adjustment Mechanism (CBAM), which the declaration criticised as a unilateral trade barrier. The Partnership for the Elimination of Socially Determined Diseases targets tuberculosis and other diseases of poverty, and members endorsed a Multilateral Guarantees (BMG) Scheme to de-risk investment. A separate statement on global AI governance called for inclusive, development-oriented rules for artificial intelligence.

Then came the tariff shock. On 8 September 2025, Brazil's President Lula convened a virtual BRICS leaders' meeting on US trade practices, after Washington imposed steep tariffs (up to 50 per cent) on Brazilian and Indian goods. Lula said "tariff blackmail is being normalized as a tool for conquering markets and interfering in domestic issues", without naming the United States; the 90-minute meeting, which External Affairs Minister S. Jaishankar attended for India as Prime Minister Modi skipped it, condemned unjustified trade practices and secondary sanctions. US President Donald Trump had earlier threatened an additional 10 per cent tariff on countries "aligning" with BRICS policies, making the virtual summit a live test of the grouping's solidarity.

The Rio-to-virtual-meeting arc is the current affairs hook examiners will use: BRICS is no longer just an annual summit but a rapid-response forum for Global South coordination against unilateral trade measures, and India's 2026 presidency in New Delhi will be judged on whether it converts that solidarity into institutions.

Key Terms

• BRIC began as an acronym, not a bloc: BRIC began in 2001 as a Goldman Sachs analyst's acronym, coined by economist Jim O'Neill to group Brazil, Russia, India, and China as the large emerging economies likely to reshape global growth, not as any political organisation. Only later did the four states convene, with the first summit at Yekaterinburg in 2009, turning an investment-bank label into a diplomatic bloc, with South Africa joining in 2010 to make it BRICS. The first BRIC summit at Yekaterinburg, Russia, in 2009, when the four leaders met formally for the first time, eight years after the acronym was coined.
• BRICS Carbon Market Partnership: Framework launched at the Rio summit to deepen carbon-market cooperation among members, positioned against unilateral measures like the EU's CBAM.
• Rio de Janeiro Declaration: The 31-point, 126-commitment outcome document of the 17th BRICS Summit (July 2025).
• Contingent Reserve Arrangement: The Contingent Reserve Arrangement is a BRICS financial safety net, a pool of 100 billion dollars pledged by the five BRICS members to provide mutual support during balance-of-payments pressures or short-term liquidity crises. It was operationalised after the 2015 Ufa summit as an alternative to exclusive reliance on the IMF. It matters for UPSC because it illustrates the Global South's push for a multipolar financial architecture. the arrangement's formal launch at the BRICS summit in Ufa, Russia, in 2015
• Multilateral Guarantees Scheme: BRICS instrument endorsed at Rio 2025 to de-risk and crowd in investment across member countries.
• New Development Bank: The New Development Bank is the multilateral development bank created by the BRICS countries through the 2014 Fortaleza agreement, headquartered in Shanghai with an authorised capital of 100 billion dollars. It lends for infrastructure and sustainable development in emerging economies and developing nations, offering an alternative to Western-dominated Bretton Woods institutions. It matters for UPSC as a pillar of BRICS cooperation and reform of the global financial architecture. The bank's early lending included renewable-energy projects in member countries, alongside urban infrastructure and water-supply projects across the Global South.
• Tariff blackmail: President Lula's phrase at the September 2025 virtual BRICS meeting for the normalisation of tariffs as a tool of economic coercion.
• Bretton Woods: Bretton Woods is the 1944 conference in New Hampshire, USA, where 44 Allied nations designed the post-war economic order. It created a system of fixed exchange rates anchored to the US dollar, which was convertible to gold, and established the International Monetary Fund and the World Bank. For UPSC, Bretton Woods is the institutional foundation of the liberal international economic order and the starting point of questions on IMF and World Bank reform. The IMF's conditionality-based lending, seen in its bailout during India's 1991 balance of payments crisis, flows directly from the Bretton Woods design.
• Global South: Global South is the term for the developing and emerging economies of Asia, Africa and Latin America, defined by shared development challenges rather than geography. It denotes a political identity: demand for a fairer voice in global governance, climate finance and trade rules. For UPSC, it is essential GS-2 vocabulary for India's leadership pitch, from G20 presidency outreach to development partnerships framed as South-South cooperation. The Voice of Global South Summits hosted by India in 2023 during its G20 presidency.
• multi-alignment: Multi-alignment is India's contemporary foreign-policy approach of engaging several major powers simultaneously, issue by issue, instead of joining any single bloc. It is the post-Cold War successor to non-alignment: India deepens defence ties with the US, energy ties with Russia and regional ties with Japan and Australia, all at once. For UPSC, multi-alignment is the GS-2 answer to how New Delhi navigates US-China rivalry while preserving strategic autonomy. India participating in the Quad with the US, Japan and Australia while remaining active in the SCO and BRICS with Russia and China.
• multipolarity: Multipolarity describes an international system in which power is distributed among several major centres rather than one superpower (unipolarity) or two blocs (bipolarity). Analysts use it to characterise the post-Cold War world of the US, China, the EU, Russia, and rising India. For UPSC IR, it is the structural justification for India's multi-alignment: engaging the Quad, BRICS, and SCO simultaneously instead of joining a single bloc. India's simultaneous membership of the Quad, BRICS and the SCO is routinely cited as evidence of a multipolar order
• BRICS: BRICS is an intergovernmental grouping of major emerging economies, founded as BRIC with the first leaders' summit at Yekaterinburg in 2009. South Africa's entry in 2010 made it BRICS; it expanded in January 2024 with Egypt, Ethiopia, Iran and the UAE, and Indonesia became a full member in January 2025. Its New Development Bank, headquartered in Shanghai, funds infrastructure in developing countries. For UPSC, BRICS is central to GS-2 debates on multipolarity and Global South representation. The New Development Bank, agreed at the 2014 Fortaleza summit, financing infrastructure and sustainable development projects.

Practice questions

IBSA: the democratic minilateral

IBSA, the India-Brazil-South Africa Dialogue Forum, was founded by the 2003 Brasilia Declaration as a forum of three large, multicultural democracies on three continents. Its pillars are political coordination, sectoral cooperation and development assistance, expressed through the IBSA Fund for poverty and hunger alleviation in developing countries and the IBSAMAR naval exercise linking the Indian Ocean and the South Atlantic. For a decade it was the Global South's most values-explicit platform.

Summitry expanded after 2006, then slowed after 2011 as BRICS absorbed the oxygen and the three capitals turned inward. The revival logic is structural: BRICS enlargement has made the big bloc harder to steer, which increases the value of a smaller democratic forum with fewer geopolitical contradictions. Renewed leaders-level engagement, reported through 2025, has put Security Council reform, digital cooperation, counter-terrorism and climate-resilient agriculture back on the IBSA table.

For India, IBSA does work BRICS cannot: it certifies the democratic identity inside India's Global South leadership, builds a reform coalition untainted by authoritarian members, and keeps Brazil and South Africa, two pivotal swing states, in India's institutional orbit. The constraint is capacity: irregular summitry and thin institutionalization mean IBSA runs on political will, and political will is the scarcest commodity in multilateralism.