India, as one of the founding members of BRICS, holds immense geopolitical and strategic significance both regionally and globally. With its rapidly growing economy, large population, and influential position in South Asia, India plays a critical role in maintaining regional stability and driving global economic growth. As the world’s most populous nation and a rising economic powerhouse, India’s political, military, and diplomatic actions resonate far beyond its borders. It is actively involved in shaping the global narrative on issues such as climate change, technology, and international security, positioning itself as a key player within BRICS and the expanded BRICS+ framework.
India’s Economic Contribution to BRICS+
India’s economic importance to BRICS+ lies in its dynamic and rapidly growing economy. As of June 2023, India’s nominal GDP reached over US$3.75 trillion, demonstrating a 16.1% growth rate. India’s economy is now the fifth largest in the world, driven by its robust service sector, including information technology (IT), industrial production, and foreign direct investment (FDI). With its expanding industrial capacity and increasing export strength, India has emerged as a global economic force. These attributes enhance BRICS’ collective economic profile, making India a cornerstone of the group’s influence on global financial and trade systems.
Intra-BRICS trade has been a significant focus for India, with total trade exceeding US$100 billion in 2022. BRICS provides India a strategic platform to expand its influence and economic relations, particularly with South American and African countries. This South-South cooperation allows India to diversify its trade relations, settle disputes, and strengthen economic and diplomatic ties with regions that are often underrepresented in Western-dominated international organisations.
India’s Role in BRICS Financial Institutions
One of India’s key contributions to BRICS+ is its involvement in the New Development Bank (NDB), which was established to provide an alternative to Western-led financial institutions like the World Bank. The NDB has approved more than 90 projects worth over US$32 billion, primarily aimed at infrastructure and sustainable development across member nations. Despite the limited size of the NDB’s operations compared to the World Bank, India’s role in the bank is crucial. India advocates for equitable financial solutions for developing economies and has benefited from NDB funding for critical infrastructure projects within its own borders.
India’s strategic push for financial independence is also evident in its support for de-dollarization within BRICS+. Along with other members, India aims to reduce dependence on the US dollar in global transactions, seeking alternatives such as the Chinese yuan (RMB) and the Indian rupee (INR). Although the appeal of these currencies is currently limited by their lack of full convertibility, India’s support for the initiative highlights its commitment to reshaping global financial norms and systems.
India’s Diplomatic Engagement and BRICS Expansion
The recent expansion of BRICS to include countries like Egypt and Ethiopia further enhances India’s diplomatic and economic standing within BRICS+. India’s relationships with these new members have been strengthened under the leadership of Prime Minister Narendra Modi. Diplomatic initiatives, such as Modi’s June 2023 visit to Cairo, have expanded India’s influence in Africa and solidified strategic partnerships. Bilateral trade between India and Egypt reached US$5.17 billion between April and December 2022, making Egypt India’s fifth-largest trading partner during that period. Furthermore, Egypt’s membership in the NDB since February 2023 aligns with India’s vision of expanding the financial reach and development support offered by BRICS institutions.
In Ethiopia, India has made significant inroads, especially in infrastructure and development through its Lines of Credit, which have supported the growth of Ethiopia’s railway network, sugar industry, and energy transmission projects. Ethiopia, as Africa’s largest recipient of Indian credit, underscores the deepening ties between the two countries. This partnership not only strengthens India’s role in East Africa but also enhances its geopolitical standing in the Horn of Africa, a region of increasing strategic importance.
