Is BRICS losing its relevance?

By Deepak Joshi Pokhrel.

BRICS is an intergovernmental organization initially comprising Brazil, Russia, India, China, and South Africa. With its headquarters in Shanghai, China, the BRICS started in 2001 as BRIC—an acronym coined by Goldman Sachs for Brazil, Russia, India, and China. South Africa was added in 2010. At present, it has eleven countries.

The major objective of the BRICS was to foster economic ties and strengthen mutual collaboration among its member states. The other objective was to challenge the American dollar hegemony by forming a new currency in international trade. But even decades after it came into existence, the vision set by the BRICS is nowhere to be seen. Logically speaking, the euphoria and fascination seen in the initial days after its formation are gradually vanishing into thin air.

Why the group, which was viewed as an emergence of an alternative to challenge the hegemony of the American dollar in international trade, is losing its relevance. This is a difficult question.

To start with, let’s assess the just-concluded 17th summit held in Rio de Janeiro, Brazil, from July 6 to 7. While the bloc was making final arrangements for the summit, the international community, mainly the US, was observing it very cautiously. The reason was simple. The bloc was planning to adopt a long list of commitments covering global governance, finance, health, AI, and climate change towards the end of the summit.

The most prominent leaders from the group’s founding members—Brazil, Russia, India, China, and South Africa—were conspicuously absent. The Russian president, Vladimir Putin, only attended the event virtually due to an outstanding arrest warrant issued by the International Criminal Court over his role in the war in Ukraine. This was a huge setback for the group. At the same time, the Chinese President, Xi Jinping, avoided the summit for unknown reasons, sending his Prime Minister, Li Qiang, instead, adding to the woes.

US President Donald Trump has been a vocal critic of the bloc. This is because the bloc has been consistently floating the idea of adopting a common currency to challenge the American dollar hegemony in international trade. In the last summit held in Kazan, Russia, the members entered a serious discussion around creating a gold-backed currency. This came at a time when the US was waging a global trade war.

While the 17th summit was announcing its declaration, the biggest takeaway came from the US President, Donald Trump. The President took to his social media, saying, “Any country aligning itself with the anti-American policies of BRICS will be charged an additional 10% tariff.” There will be no exception, he strongly warned. The remarks of the President were sufficient for its founding members to review their vision, as some of its members, mainly India, are heavily dependent on the US for economic trade. However, despite Trump’s warning, India decided to import petroleum products from Russia.

When we look at the economic trade of the bloc’s members with the US, we will find that Brazil, China, and India, for example, all export more to the US than they import from it. Brazil’s exports to the US reached a record USD 40.3 billion in 2024, representing 15% of its total exports, while China’s trade surplus with the US was also substantial. Likewise, India’s exports to the US were USD 79.44 billion during 2024. All these countries are eyeing becoming a regional economic superpower, and they need the US to realize their vision. Under such circumstances, they would rather risk the future of BRICS than antagonize the US.

Many believe that the founding members are divided over the key issue—the emergence of an alternative to challenge the American dollar in international trade. Some are not openly supporting the idea for obvious reasons. India—a key member of the bloc—refused to toe the line of Washington.

Along with the divided strategy, the internal rivalries among its members—mainly India and China—have been hindering the translation of its vision into a reality. India, currently the fourth largest economy, has a history of periodic confrontation and strategic competition with China—another key member of the bloc. India is very much mindful of the fact that it would not be a prudent idea to embrace an alternative to the US dollar, thinking it could make China more powerful and undercut its long-term interest.

At present, one emerging challenge is posing a threat to the future of the bloc. The Rio declaration intended to address the issue of climate, conveying a multilateralism and unity to achieve the goals of the Paris Agreement—something that is problematic. On one hand, China is making rapid strides in the green energy sector. On the other hand, some BRICS members are the world’s biggest emitters of greenhouse gas. 

In December 2024, after he was elected the US president, Trump said we need a commitment from these countries that they will not create any BRICS currency nor support any other currency to replace the mighty US dollar. He also warned that if they disobeyed, they could face 100% tariffs and expect to say goodbye to sailing into the wonderful US economy. The utterance on the part of the US President sabotaged the enthusiasm of the bloc’s members to offer an alternative economic model.

Now, only time will tell whether the members of the bloc address their inner contradictions and rise above their vested interests to ensure BRICS remains relevant and provides credible leadership in a fast-changing global order.