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Context

With the BRICS summit and a multi-nation trip of Africa and South America under Prime Minister Narendra Modi's belt, India is shifting its focus to bolstering itself politically and economically.

What is BRICS?

The BRICS grouping comprises South Africa, Brazil, China, India, and Russia, the five largest developing economies in the world. Its initial name was "BRIC" and it was created in 2006; South Africa joined in 2010.

It represents about 40% of the world's population. The goal is to encourage multipolarity, economic cooperation, and changes to the World Bank and the International Monetary Fund, which are global institutions for governing. In 2014, the BRICS nations established the New Development Bank (NDB) to provide financing for development and infrastructure projects in their countries and other developing nations. All members have equal voting power, and it's based in Shanghai.

Significance of BRICS

Unified Reformist Platform: BRICS functions as a unified and purposive bloc, advocating for reforms in global multilateral institutions, aiming to democratise global governance.

New Development Bank (NDB)

Established in 2013, with an initial capital of US$ 50 billion.
Serves as a credible alternative to Western-dominated institutions like the IMF and World Bank.
Capital is equitably distributed among members, reflecting a commitment to collective action.

Trade and Investment Dynamics

India-China bilateral trade reached US$ 135.98 billion in 2022, a historic high.
BRICS nations’ export growth surpasses global average, strengthening intra-bloc investments.
Integration includes FTAs, tariff reductions, and export-oriented strategies, boosting FDI inflows and outflows.

FDI Growth

As per UNCTAD, BRICS FDI holdings rose from US$ 27 billion (2010) to US$ 167 billion (2020).
Their share in global FDI assets increased from 1.3% to 4.7%.
China led as the top contributor and recipient, with Brazil and India also witnessing robust FDI growth.

CGETI Initiatives

BRICS Contact Group on Economic and Trade Issues (CGETI) advocated for investment-friendly policies, especially post-COVID.
Emphasis on transparency and simplifying administrative processes to foster sustainable development-oriented investments.

What is Quads?

India, the United States, Japan, and Australia form a strategic group known as the Quad (Quadrilateral Security Dialogue). With an emphasis on maritime security, technology, climate change, and disaster response, it seeks to establish an Indo-Pacific region that is free, open, and inclusive. Many perceive it as a response to the rising might of China.

Significance of the Quad

Delivering Indo-Pacific Outcomes

Addresses key regional challenges like health security, climate change, infrastructure, cyber security, critical technologies, disaster relief, maritime security, and counter-terrorism.
During the COVID-19 pandemic, the Quad focused on vaccine diplomacy, health systems, and economic recovery.

ASEAN Centrality

Quad countries reinforce ASEAN centrality, aligning efforts with ASEAN-led architecture and the ASEAN Outlook on the Indo-Pacific.
All members are ASEAN Dialogue Partners, ensuring regional inclusivity.

Strengthening Bilateral Ties

India holds 2+2 ministerial-level dialogues with Japan, USA, and Australia.
Key agreements with the USA: COMCASA (2015) and LEMOA (2016).
India-Japan ties enhanced with the civil nuclear deal (2017).
Japan became a permanent member of Malabar naval exercises (2015).
AUSINDEX (India-Australia naval exercise) expanded in scale.
These engagements foster military trust, interoperability, and deeper political alignment.

Geopolitical Response

Japan adopts a more anti-China posture focusing on territorial security.
Australia sees China as a strategic rival, seeking multilateral security partnerships.
The USA benefits from the Quad as an umbrella for Indo-Pacific security, improving intelligence sharing and communication control across the region.

Significance of Quad for India

Counters China's Rise: Strategically balances China’s economic and military expansion.
Border Support: In case of border hostilities, India can seek support from Quad partners.
Naval Strategy: Enables strategic maritime operations in the Indo-Pacific.
Security Balance: India–US ties ensure balance at nuclear and conventional levels.
Diplomatic Strength: U.S. partnership boosts India’s geopolitical stature.
Defence Economy: U.S. presence helps ease India’s defence burden.
Economic Advantage: Enhances access to the U.S. market, supporting citizen prosperity.
Beyond China: India sees Quad as a tool to reshape Indo-Pacific’s techno-economic and security order.
Supply Chain Realignment: Quad focuses on critical tech, telecom, health, semiconductors, blending development with security.

India’s Foreign Policy Strategy

India's strategy takes a "multi-alignment" approach to handling great power conflicts, as evidenced by parallel activities in the BRICS and Quad forums. While India seeks to strike a balance with key global powers, relations have not progressed linearly. Frontier tensions tested China's initial optimism, resulting in a stronger collaboration with the United States. Meanwhile, Russia's affiliation with China presents concerns.

Challenges Within the Quad

The Quad aims to counter China’s Indo-Pacific dominance but faces internal strains.
The US “America First” policy under Donald Trump demanded allies like Japan and Australia raise defense spending to 3% of GDP, creating friction and distrust.
Trump’s “trade first” strategy undermines traditional security alliances in Asia.
US interest in a “big beautiful deal” with China and improved commercial ties led allies to question US Indo-Pacific commitment.
Unexpected US-Pakistan engagement stirred Indian concerns over strategic trust.

Limitations of BRICS

Internal discord, especially India-China tensions, challenges BRICS unity.
Lack of collective defense was evident during US-Israel actions on Iran, with Russia and China prioritizing national interests.
Argentina's rejection of BRICS signals its declining appeal.
Russia’s dependence on China post-Ukraine invasion weakens India’s balancing strategy.
Bilateral deals with the US by Russia and China contradict BRICS' vision.
While de-dollarization is discussed, India’s caution shows trade-based pragmatism, though local currency trade with Russia continues.

Way Forward

India should prioritize bilateral interactions that directly benefit national interests, rather than just symbolic ones.
India's ability to project influence globally is dependent on its domestic strength and durability. Accelerating economic reforms and reestablishing domestic political unity are important.
China is attempting to fill the regional void left by India's strained relations with Pakistan and Bangladesh, taking advantage of SAARC's dysfunction.
Beijing has already established an Indian Ocean forum of its own.
It consolidates its economic footprint in Argentina, Brazil, Ghana, and Namibia.
India must restore its leadership position in South Asia without being hampered by an "inferiority complex" about being a "big brother."
Engagements with developing countries should prioritize concrete collaboration in trade, technology, and military over ideological alignment.

Practice Question

Q. India’s Act East Policy aims to deepen engagement with Southeast Asia amid growing Chinese influence. Critically examine the effectiveness of this policy in ensuring strategic and economic gains for India.

Beyond BRICS and the Quad