BRICS members are set to implement 'mutually reinforcing policy levers' to enhance internal trade and strengthen global value chains. The New Delhi Declaration highlights a shift toward local currency settlements and MSME support.
- Intra-BRICS trade currently accounts for only 4.1% of the bloc's global export share.
- The New Delhi Declaration emphasizes local currency settlements and digital infrastructure.
- An 'Invoice Discounting Mechanism' is proposed to support MSMEs.
New Delhi: In a decisive move to ensure resilient global value chains, the BRICS nations have announced plans to utilize "mutually reinforcing policy levers" to stimulate trade within the grouping. According to the New Delhi Declaration issued recently, this strategic shift aims to deepen economic integration and reduce dependencies on traditional trade corridors.
The declaration builds upon discussions held during the BRICS trade ministers' meeting in Jaipur. The proposed levers include enhancing regional integration, diversifying economies beyond primary commodities, investing in physical and digital infrastructure, and upgrading workforce skills. Despite BRICS members accounting for a massive 21.6% of global exports in 2025, intra-bloc trade remains a mere 4.1%, revealing a significant untapped opportunity.
Why This Matters
BozokMedia analysis shows that the current trade architecture within BRICS is heavily skewed. The trade flow follows a "China-centred hub-and-spoke pattern" rather than a balanced, multilateral network. While China's trade with members is massive—with exports reaching $551 billion—other members like India face significant trade deficits, with India's deficit standing at $226 billion. Bridging this gap is essential for collective economic stability.
To realize the full potential of the bloc, member nations must transition from soft initiatives to a comprehensive, region-wide trade agreement.
Commerce Minister Piyush Goyal has been a vocal proponent of this transition, urging member and partner countries to link their payment systems and conduct trade using local currencies. This move is designed to foster deeper, more resilient supply chains and reduce vulnerability to external economic shocks.
Empowering MSMEs through Finance
A critical component of the New Delhi Declaration is the endorsement of an 'Invoice Discounting Mechanism.' This tool is specifically designed to assist Micro, Small, and Medium Enterprises (MSMEs) by providing them with immediate liquidity against unpaid invoices. This addresses the chronic working capital shortages that often prevent smaller players from participating in global value chains.
| Feature | Current Status | Strategic Goal |
|---|---|---|
| Trade Pattern | China-Centric (Hub-and-Spoke) | Balanced Trading Network |
| Currency Usage | Dominance of Global Reserve Currencies | Increased Local Currency Settlement |
| MSME Support | Structural Financial Constraints | Invoice Discounting Mechanism |
Frequently Asked Questions
1. What is the main challenge facing intra-BRICS trade?
The primary challenges include a lack of a comprehensive trade agreement, high trade barriers, and an imbalanced trade pattern dominated by China.
2. How will local currency settlement help?
It reduces reliance on the US Dollar, lowers transaction costs, and enhances the economic sovereignty of member nations.
