Economic Diplomacy

The New Delhi BRICS summit exposed both the promise and the limits of the grouping. Economically, it achieved more than the talk of a “BRICS currency” suggested, but much less than would be needed to create a serious alternative to the Western financial system. Politically, its careful language showed that BRICS is united mainly by dissatisfaction with the existing order. Its members still disagree about what should replace it. The summit’s economic progress was practical, not revolutionary. Members supported work on cross-border payment systems, greater use of national currencies in trade and investment, and more local-currency lending through the New Development Bank. They advanced the BRICS Economic Partnership 2030, customs cooperation, logistics networks, and proposals for investment guarantees and risk-sharing. These steps could lower transaction costs and reduce dependence on the dollar if implemented. However the limits are more important than the slogans. There was no common currency, no binding free-trade agreement, no fully operational BRICS payment network, and no large new investment fund. Even local-currency trade remains subject to national priorities. This is understandable. China, India, Russia and the other members have different exchange-rate systems, capital controls, banking rules and strategic interests. A common currency would be politically attractive but economically premature. The realistic path is gradual cooperation, not monetary union. The political record was less harmonious. Ukraine disappeared from the final declaration. Instead of risking a direct clash between Russia and members unwilling to endorse Moscow, BRICS used general phrases about sovereignty, dialogue and diplomacy. This was not genuine agreement. It was disagreement managed through silence. Gaza received more explicit treatment. The declaration supported humanitarian access, opposed forced displacement and reaffirmed Palestinian statehood and full membership of the United Nations. That position reflected a long-standing Global South consensus. Iran was more difficult as it is itself a BRICS member, while the United States and Israel are central to India’s strategic and economic calculations. The final text condemned escalation, attacks on civilians and threats to safeguarded nuclear facilities, but avoided naming states or assigning blame. Was India restrained because of Israel and Washington? The answer is probably yes in the broad diplomatic sense, but not in the crude sense that either power dictated the wording. India is trying to preserve strategic autonomy. It wants stronger ties with Washington and Israel while maintaining relationships with Iran, Russia and the Arab Gulf. The wording also reflected divisions inside BRICS, especially between Iran and the United Arab Emirates. India’s restraint was therefore both national strategy and coalition management. However, the success should not conceal India’s own contradictions. Reports that the richest 10 percent control nearly 65 percent of wealth and about 58 percent of national income point to a deeply unequal economy. Large tax burdens on ordinary citizens and the writing off of nearly ten lakh crore rupees in bad loans deepen the sense that growth serves the privileged. A country cannot credibly speak for the Global South abroad while inequality widens at home. The summit built a useful canvas, but it did not cover every crack. The summit’s wider lesson is uncomfortable. BRICS is becoming a platform for economic diversification and a more multipolar world, but it is not yet a coherent geopolitical bloc. India succeeded because it did not force agreement where agreement was impossible. It managed contradictions rather than removing them.