BRICS Summit 2026: India Hosts 18th Edition in New Delhi — Xi Jinping's First Visit Since 2019, Local-Currency Trade, and the Architecture of a Multipolar World

Why in News

India is hosting the 18th BRICS Summit on September 12–13, 2026 at Bharat Mandapam, New Delhi. This is India's fourth BRICS chairmanship (previous: 2012, 2016, 2021). The summit's theme — "Building for Resilience, Innovation, Cooperation and Sustainability" — forms the acronym BRICS itself, a first in the group's history. Chinese President Xi Jinping's expected attendance would mark his first visit to India since October 2019 (Mamallapuram informal summit), signalling a significant diplomatic thaw after years of post-Galwan tensions.

Background

BRICS began as a Goldman Sachs investment concept in 2001 (coined by economist Jim O'Neill), describing Brazil, Russia, India, China, and South Africa as the world's fastest-growing major economies. It evolved into a formal intergovernmental forum with the first BRIC Summit held in Yekaterinburg, Russia, in 2009. South Africa joined in 2010, creating the BRICS acronym.

Current Developments

Over the course of India's 2026 BRICS chairmanship, more than 350 ministerial and expert-group meetings were held across 25 Indian cities, covering agriculture, trade, digital innovation, counter-terrorism, health, energy transition, and cultural cooperation. The summit will consolidate these outcomes into the New Delhi Declaration 2026.

Russian President Vladimir Putin confirmed attendance — a significant diplomatic signal given Russia's Western isolation since 2022. Xi Jinping's participation, if confirmed, would be his first bilateral India visit in seven years, building on the October 2024 Kazan sideline meeting where Foreign Ministers agreed on "gradual normalisation" of India-China relations. Leaders from all 10 full BRICS members and several BRICS+ partner countries are expected.

Key agenda items reported ahead of the summit include: (1) progress on local-currency trade settlement and a BRICS payment mechanism to reduce reliance on the US dollar; (2) reform of the New Development Bank (NDB)'s lending framework; (3) food and energy security amid El Niño impacts; (4) reform of global multilateral institutions (IMF, WTO, UNSC); and (5) a BRICS Science, Technology and Innovation Framework.

Key Facts

• BRICS membership (2026): Brazil, Russia, India, China, South Africa (founding 5) + Egypt, UAE, Ethiopia, Iran, Indonesia (joined 2024–25).
• New Development Bank (NDB): Headquartered in Shanghai; authorised capital $100 billion; funds sustainable infrastructure and development projects in emerging economies. India is a founding shareholder.
• Contingent Reserve Arrangement (CRA): A $100 billion fund to protect BRICS members from short-term balance-of-payment crises; China contributes $41 billion, Russia+Brazil+India $18 billion each, South Africa $5 billion.
• BRICS economies together account for approximately 40% of global GDP (PPP), 26% at market exchange rates, 45% of global population, and ~20% of world trade (2025 data).
• India's trade with BRICS partners exceeded $200 billion in 2025–26, with China and Russia as the dominant bilateral partners.
• The theme "Building for Resilience, Innovation, Cooperation and Sustainability" is the first BRICS theme to spell out the acronym itself.

Constitutional Provisions

Under Article 253 of the Constitution, Parliament has the power to make laws for implementing any treaty, agreement, or convention with any other country or countries or any decision made at any international conference. The executive's power to conduct foreign policy and enter treaties derives from Article 73 (executive power of the Union coextensive with legislative power) and the residuary entry in the Union List (Entry 14: treaties, agreements). International relations, including BRICS commitments, fall under the exclusive domain of the Union.

Legal Framework

• Foreign Exchange Management Act (FEMA), 1999: Governs cross-border capital and current account transactions; any BRICS local-currency settlement mechanism will require RBI/FEMA amendments to operationalise rupee-ruble, rupee-yuan trade settlement beyond existing bilateral swap lines.
• Foreign Contribution (Regulation) Act (FCRA), 2010: Relevant for channelling of NDB funds into Indian projects — NDB grants and soft loans routed through government are exempt from FCRA restrictions.
• Competition Act, 2002: Any BRICS investment facilitation agreement must be assessed for compliance with India's antitrust framework (CCI jurisdiction).

Institutional Framework

• Ministry of External Affairs (MEA): Leads India's BRICS sherpa process; the BRICS Sherpa coordinates across all working groups.
• New Development Bank (NDB): Multilateral development bank; India's former Finance Minister was its President (2022–25). NDB has approved over $35 billion across 100+ projects globally.
• Contingent Reserve Arrangement (CRA): Managed by BRICS central banks; RBI is India's designated authority.
• BRICS Academic Forum / Think Tanks Council: ORF (Observer Research Foundation) coordinates India's contribution.
• BRICS Women Business Alliance, Young Diplomats Forum: Track-II and people-to-people engagement mechanisms.

Economic Dimensions

The central economic push at the 2026 summit is de-dollarisation of trade. India has already operationalised rupee-based trade with Russia (oil payments) and the UAE (part of the BRICS framework). A formal BRICS payment platform — distinct from SWIFT — is under design; the NDB is exploring a reserve currency basket backed by member-country currencies. For India, local-currency trade reduces its exposure to US dollar liquidity shocks and SWIFT-based sanctions risk.

The NDB's India portfolio includes projects in metro rail, renewable energy, water supply, and urban infrastructure. India has drawn approximately $8–9 billion from the NDB since 2016, making it among the top borrowers within the group. The 2026 summit is expected to greenlight a new "BRICS Green Infrastructure Fund" and a framework for BRICS members' digital payment interoperability.

Banking and financial angle: RBI has been negotiating bilateral local currency swap agreements with member central banks. Any formalisation of a BRICS settlement currency or unit (sometimes called "BRICS Pay" or "BRICS Unit") would affect India's balance-of-payments accounting under the FEMA framework and require legislative amendments. SEBI has already facilitated "BRICS bond" listings on Indian exchanges for NDB-issued rupee-denominated bonds ("masala bonds").

International Relations

India occupies a unique position in BRICS: it is simultaneously a member of BRICS, the Quad (with the US, Japan, Australia), the G7-associated G20, and SCO. This "multi-alignment" or "strategic autonomy" approach allows India to shape multilateral institutions without bloc allegiance. The 2026 summit tests this balance: India must manage China's agenda for a more China-centric BRICS financial architecture while advancing India's preference for rule-based, non-coercive multilateralism.

The India-China reset is the summit's highest-profile diplomatic dimension. Since the Galwan Valley clash of June 2020, bilateral relations deteriorated significantly. The October 2024 disengagement from friction points at the Line of Actual Control (LAC) and subsequent confidence-building measures set the stage for a potential Xi-Modi summit in New Delhi — the first on Indian soil since October 2019.

For the Global South, BRICS under India's chairmanship emphasises inclusive development finance and reform of Bretton Woods institutions (IMF voting rights, WTO appellate body restoration), positioning BRICS as a reform bloc rather than an anti-Western one.

Challenges

• Internal divergences: BRICS members have sharply differing interests — China seeks a dollar-alternative reserve currency; India prefers incremental reform of existing institutions. Russia wants political legitimisation; Brazil and South Africa seek development finance.
• Expansion management: With 10+ members and more BRICS partner states, agenda coherence and decision-making are increasingly complex.
• India-China trust deficit: Despite the 2024 LAC disengagement, full normalisation of border relations remains incomplete; this limits the strategic depth of BRICS cooperation.
• De-dollarisation feasibility: The US dollar's role is structurally embedded in global trade contracts, commodity pricing, and reserve assets; any BRICS alternative faces enormous network-effect barriers.
• NDB credit rating pressure: Russia's membership and Iran's inclusion have complicated NDB's access to Western capital markets; the bank's AAA/Aa1 ratings are under review by Fitch and Moody's.

Government Initiatives

• Neighbourhood First + Act East + Connect Central Asia: India's regional diplomacy aligns with BRICS expansion into the Indo-Pacific and Eurasia.
• UPI Internationalisation: India is promoting UPI as a model for BRICS digital payment interoperability.
• Rupee Trade Settlement: RBI has enabled 22 banks in 18 countries to open Special Rupee Vostro Accounts (SRVAs) for rupee-based trade settlement — a key building block for BRICS financial architecture.
• BRICS Startup Forum 2026: India hosted 14 countries' startups; India won 3 of 5 award categories at the BRICS Young Innovator Prize.

Way Forward

The Economic Survey 2025–26 advocated for India to use its BRICS chairmanship to advance reformed multilateralism — specifically, WTO Appellate Body restoration, IMF quota realignment reflecting current economic weights, and greater voice for the Global South in climate finance. The NITI Aayog's Vision 2047 document identifies multilateral economic diplomacy (including BRICS NDB access) as a key financing mechanism for India's $5-trillion economy goal. India should push for concrete BRICS outcomes on digital public infrastructure interoperability and resilient supply chains in critical minerals — areas where India's domestic leadership (Aadhaar, ONDC, critical-mineral corridors) gives it comparative advantage.

Possible Mains Questions

1. India's simultaneous membership of BRICS, Quad, and SCO reflects its "strategic autonomy" doctrine. Critically examine whether this multi-alignment is a strength or an incoherence in India's foreign policy. (GS-II, 250 words)
2. Assess the prospects and limitations of a BRICS alternative to the SWIFT payment system and the US dollar's reserve currency status, with specific reference to India's interests. (GS-III, 250 words)

Possible Prelims MCQs

1. With reference to the New Development Bank (NDB), which of the following statements is/are correct? (1) Its headquarters is in Shanghai, China. (2) Its authorised capital is $50 billion. (3) India is a founding shareholder. Select the correct answer: (a) 1 and 2 only (b) 1 and 3 only (c) 2 and 3 only (d) 1, 2 and 3. Answer: (b)
2. The 'Contingent Reserve Arrangement' (CRA) of BRICS was established to: (a) Finance long-term infrastructure in emerging economies (b) Protect member countries from short-term balance-of-payment pressures (c) Create a BRICS reserve currency backed by gold (d) Provide grants to least developed countries among BRICS members. Answer: (b)

Essay Dimensions

1. BRICS: A forum for reformed multilateralism or a challenger to the Western-led world order?
2. De-dollarisation and the future of global finance: ambition versus architecture
3. India's multi-alignment doctrine: Strategic wisdom in a polarised world
4. The Global South's quest for a seat at the table: From G77 to BRICS
5. NDB versus World Bank: Development finance in the 21st century

Interview Questions

1. India is hosting BRICS 2026. How does BRICS membership serve India's core national interests differently from G20 membership?
2. Xi Jinping may visit India for the BRICS summit. What are India's strategic priorities in a bilateral summit with China?
3. Do you think a BRICS common currency is feasible? What would it take?
4. Some critics argue BRICS has become "CRICS" — China-dominated. Do you agree?
5. As an IAS officer, how would you advise the MEA to leverage NDB financing for your state's infrastructure projects?

FAQ

Q: What is the BRICS Chairmanship rotation?

A: The chairmanship rotates alphabetically by country name in English. India's chairmanships have been in 2012, 2016, 2021, and 2026. Brazil chaired in 2025; South Africa will chair in 2027.

Q: How many countries are in BRICS as of 2026?

A: 10 full members — Brazil, Russia, India, China, South Africa, Egypt, UAE, Ethiopia, Iran, and Indonesia. Several others have "BRICS partner" status.

Q: What is the difference between the NDB and the IMF?

A: The NDB provides project-based development finance (loans for infrastructure) mainly to BRICS members, without IMF-style conditionalities. The IMF provides balance-of-payments support (short-term stabilisation loans) with economic policy conditions attached.

Further Reading

• MEA's official BRICS India 2026 portal: mea.gov.in/brics-2026
• New Development Bank Annual Report 2025: ndb.int
• Economic Survey 2025–26 Chapter on International Trade and Finance
• ORF Issue Brief: "India's BRICS Chairmanship: Priorities and Prospects"