BRICS and the US Dollar: India’s Stance on Expansion Signals Shift in De-Dollarization Efforts

• India objects to BRICS expansion driven by China and Russia.
• Russia and Iran strengthen ties, moving away from the US dollar.
• ASEAN interest in BRICS could add $3.6 trillion to collective GDP.

India has expressed reservations on the rapid expansion of the BRICS economic bloc, as China and Russia push to include more countries and solidify their geopolitical influence. This internal rift within BRICS highlights the potential challenges of balancing diverse interests and ambitions among its members.

The BRICS alliance, originally composed of Brazil, Russia, India, China, and South Africa, has expanded significantly in the past year. The United Arab Emirates, Egypt, Iran, and Ethiopia have joined the bloc, while Argentina declined the invitation and Saudi Arabia has yet to decide. India’s discontent with the new inductions signals potential challenges for future expansions.

India is particularly displeased with the direction BRICS is taking, with plans to reject new invitations to the 2024 summit. According to sources, India believes that China and Russia are leveraging BRICS to advance their own agendas, potentially using the bloc as a tool to counter Western influences, specifically targeting the U.S. and Europe. India’s stance is to maintain the original ethos of BRICS as an equal partnership and suggests a five-year gap before considering further expansions to allow the bloc to stabilize.

Both China and Russia are keen on expanding BRICS to strengthen their geopolitical influence. They have advocated for the inclusion of more countries, which could reshape global economic alliances. Pakistan, another applicant for BRICS membership, has further increased tension with India due to the long-standing hostilities between the two nations.

The inclusion of Southeast Asian nations could potentially add $3.6 trillion to BRICS’s collective GDP. ASEAN countries, with a combined GDP of approximately $3.67 trillion, are seen as significant targets for expansion. Malaysia and Thailand have already expressed interest in joining, perceiving BRICS as a counterbalance to Western-led economic institutions.

BRICS members are also strengthening their bilateral relationships. Russia and Iran are negotiating a new partnership treaty to enhance their cooperation. This move comes after Iran joined BRICS last August, building upon a longstanding 20-year strategic agreement with Russia.

The two countries have also agreed to trade in local currencies, moving away from the U.S. dollar, further solidifying their economic ties. The BRICS alliance is actively working to diminish the dominance of the U.S. dollar in international transactions, promoting the use of local currencies among its members.