India- China gets set for BRICS summit

Context

• India and China needs to improve ties in order to brighten the prospects of BRICS

What is BRICS?

• BRICS is an association of Brazil, Russia, India, China and South Africa, the five fastest emerging nations
• BRICS comprises of 43% of the world population, 30% of the world GDP and 17% share in the world trade.
• BRICS aims to help developing nations step up and heighten their position in international organizations like IMF and World Bank.
• BRICS have formed their own development bank, with its net worth to be around $100 billion 

What is the significance of BRICS?

• BRIC(S) was established as a response to global financial crisis of 2008, led by the Bretton Woods institutions
• The BRICS nations have together been able to:
  1. Promote exports
  2. Coordinated responses in international legal disputes
  3. Successfully negotiated for an increase in voting shares at the World Bank.

What is the significance of BRICS in India’s context?

• India being a very ambitious country has high aspirations to become a global super power. BRICS is the stepping stone to this.
• Through G4 (Brazil, Germany, India and Japan) and BRICS it can ask strongly for UNSC reforms to make India as a Permanent Member.
• Through BRICS, the countries can have multilateral relations in their local currencies. This helps all of them directly as the ForEx is not depleted and their own currencies are strengthened.
• They promote South-South cooperation and North-South dialogue. (South represents developing countries and North represents Developed)
• BRICS Banks can help in infrastructure development of all countries unlike IMF or World Bank which needs large amounts of gold as collateral on top of structural economic reforms.
• BRICS may prove to be a great platform for India where its voice will be heard by all countries.

How BRICS helped in strengthening the stance of emerging economies?

• BRICS may help to attract more investment into the five economies, especially India and China because

1. 40% of the world’s population
2. quarter of its growth at $17 trillion

• BRICS New Development Bank set up in 2015 has already given out about $6 billion in loans for 23 projects across BRICS countries

Can the India-China concerns negatively impact the BRICS agenda?

• BRICS now faces its most challenging summit because of growing differences between its two biggest members, India and China.

Some of the issues are:

Doklam issue

• While both sides smoothed out by disengaging the troops at Doklam and obtaining assurance that none shall change the status quo at the tri-junction area more hard work would be required to restore the situation.

 Nuclear Suppliers Group 

• China’s opposition to India’s membership of the Nuclear Supplier’s Group (NSG) has been an issue for over a decade now.
• China’s uneasiness at allowing India a seat at the table shows the lack of mutual incompatibility among them.

 China’s Belt and Road Initiative (BRI)

• India’s refusal to be a part of the BRI over sovereignty issues was a cause for tensions before the Doklam stand-off between both nations
• The rift over China’s Belt and Road Initiative (BRI) is likely to dominate discussions at BRICS, as it now a priority above all of China’s policies.
• China will surely aim to bring the BRI on the table for negotiations at BRICS
• The fiction between two of the most crucial nations of BRICS can most likely impact the BRICS agenda.
• Rift between the two nations may even overshadow the overall objectives and concerns of the BRICS summit.

The road ahead

• The upcoming BRICS summit appeared to have exerted enough pressure on both China and India
• BRICS has fared better than two other groupings, SAARC and the Non-Aligned Movement, which was skipped by India recently
• It is thus crucial for both the power houses to set aside their differences and work together as two of the fast growing economies of the world.