BRICS trade has surged in recent years thanks to a flurry of new deals and renewed partnerships, propelling the alliance to global prominence in cross-border transactions.
According to Bloomberg's recent report, BRICS member trade now accounts for 37 percent of global cross-border transactions. This led to an increase in the alliance's GDP from 31.5 percent to 37 percent of the world economy. In comparison, the G7 nations collectively hold a GDP of 29.9 percent worldwide, positioning BRICS 7.01 percent ahead in terms of GDP compared to the G7.
With its dominant economic position within the group, China plays a crucial role in bolstering BRICS' influence in global economic matters. In 2022, China's contribution accounted for over 70 percent of the total BRICS GDP growth.
World Bank data forecasts that intra-BRICS trade will exceed $500 billion by 2024. This prediction is backed by the data that between 2017 and 2022, trade among the bloc's five current members surged by 56 percent to reach $422 billion.
Brazil and Russia, with their natural resources and agricultural products, naturally align with Chinese demand, fostering economic partnerships. In contrast, India and China have limited trade ties, mainly due to their geopolitical rivalry and a contentious border dispute.
Apart from trades, BRICS' New Development Bank has sanctioned nearly $33 billion in loans since its establishment in 2015, primarily dedicated to water, transportation, and infrastructure ventures. Operating beyond BRICS, the bank aims to fund infrastructure projects in member countries and beyond.
Although the figure is considerably smaller than that of the World Bank Group, which has committed $70.8 billion to its partner countries, the NDB continues to make strides in financing development initiatives.
Ongoing de-dollarization efforts
It is known that BRICS nations have joined forces to establish substitutes for international trade and finance - a strategy known as de-dollarization. The approach aims to lessen reliance on the U.S. dollar by advocating for the use of their national currencies in trade transactions.
Proposals for BRICS nations to adopt a unified currency have yet to gain momentum. However, the recent addition of major fossil fuel producers like Saudi Arabia and the UAE expands its potential to challenge the dominance of the U.S. dollar in oil and gas trading.
India and the UAE were the first countries to adopt local currencies to settle trade within BRICS. In mid-August, The Indian Oil Corporation (IOC) bought 1 million barrels of oil from the UAE's National Oil Company (ADNOC) and concluded the transaction using the Rupees. India also engaged in another trade pact settled in local currencies by purchasing gold valued at $1.7 million from the UAE.
The trade volume between Russia and India surpassed 3.9 trillion rubles (equivalent to over $40 billion) in the initial three quarters of the current year. Deputy Minister of Economic Development of the Russian Federation, Dmitry Volvach, highlighted that Russian exports to India more than doubled during this period, exceeding 3.5 trillion rubles.
"It is safe to say that this year, we will renew our historical record of mutual trade," the Russian representative said.
Meanwhile, official data reveals that trade between Russia and China has exceeded $200 billion this year, reaching the countries' target a year earlier than expected. The General Administration of Customs in China reported that trade between the two nations for the January-November period amounted to $218.1 billion.
Exports from Beijing to Russia surged by 50 percent year-on-year, totaling $100.3 billion for the January-November period, while imports from Russia increased by 12 percent to reach $117.8 billion. Both figures have surpassed the previous annual records established last year, with the majority of all transactions concluded in either rubles or yuan.