BRICS+ Could Reshape Global Trade and Reduce Dollar Dependence—Here's How

The changing world order and dynamics have inevitably given rise to the emergence of BRICS as a strategic grouping to rewrite several economic and political dimensions on this globe. BRICS was neither conceptualized as anti-hegemonic nor institutionalised to delegitimise the world order. The raison d’etre of BRICS, at the time of its conception, was to facilitate the rise of multipolarity and reforms in global institutions in accordance with the changing economic and demographic landscape of the world. The consistence and coherence of the objectives of this otherwise unconventional grouping of politically and economically diverse countries have helped it earn a niche and fame no other institution or group has ever earned. The potential of the grouping has been a growing concern for some countries who remained unquestionable on their respective geo political and geo economic policies. Perhaps, that could be the reason why the BRICS is looked up with both awe as well as skepticism around the world.

Heavy handedness and despotic whims have laid an opportune moment for BRICS+ to gather momentum and work towards economic resilience to absorb such shocks in future. India’s vision of manufacturing scale is yet to arrive and it has relatively an undiversified export market making it vulnerable to external shocks. US is the largest trading partner for India with a share of over 18% in its export market with exports reaching near 86.5 billion dollars in 2024. The top Indian exports to the US include Pharmaceuticals, Telecom Instruments, Gems and Jewelry, Textiles and Apparels, Marine Products, Leather and Footwear etc. Certain products like Pharmaceuticals, Electronics and Semi-Conductors, Energy Products and Critical Minerals are completely exempted from tariffs. However, sensitive, labor intensive sectors like Textiles and Apparels, Gems and Jewelry, Marine Products, Paper and Wood Products etc. which are manufactured from emerging and critical MSMEs, are facing an onslaught due to the 50 percent tariffs imposed by the US.

To make our industries competitive, efficient and resilient, we need to diversify our export destinations. UAE, Netherlands, China, Bangladesh, Singapore are some of the largest export markets after the US.  Apart from exploring these markets, we should leverage the rise of BRICS+ opportunity to expand our overseas market. With the inclusion of new members and the prospect of additional members in the near future, BRICS is set to re define the economic landscape of the global south in particular.

South Africa, Egypt and Ethiopia are already members of BRICS from the African Nations while four other countries have shown interest and have become partner countries too. Under the controversial Project 2025 of US, there is an uncertainty looming around the withdrawal of US funding of the two big global financial Institutions- World Bank and IMF. The US being the largest investor in World Bank and IMF, its prospective fund withdrawal could shatter the economies of several aid dependent countries. In addition to this, the US also decided to dismantle the US Agency for International Development (USAID) and cancel several foreign aid contracts to Africa in early 2025. Without the US support, the African countries would be looking for alternatives to sustain their progress in several critical areas of socio-economic importance.

Indeed, this is a great opportunity for the BRICS+ to build more collaboration in the African continent and building strategic partnerships there. Further, the BRICS New Development Bank (NDB) is becoming an important source of additional finance for the African countries. Till now, the NDB has financed 19 projects in Africa, which includes both sovereign and non-sovereign projects. With this, the NDB is hopeful of strengthening economic partnerships with BRICS+ and improving access to different markets to enhance trade and investment opportunities in Africa’s emerging markets.

The idea of de-dollarization, though a pipe dream at present has constructed a framework for countries to contemplate on developing a common currency. India and China have already started promoting trade in local currencies. Such precedents of reduced dependence on dollar, if adopted largely, would help in dodging the uncertainties arising out of future dollar fluctuations as well as dollar weaponisation.  Moreover, it would give the countries of the global south more choices and help unlock their full potential. Thus, this is indeed a great opportune moment to mark the worst time as our best time to build our strategies and resilience.

The views expressed in this article are solely those of the author.