BRICS Tariff Huddle

Context:

External Affairs Minister S. Jaishankar will represent India at a leaders’ virtual BRICS summit convened by Brazil’s President Luiz Inácio Lula da Silva to discuss U.S. tariff hikes and multilateral responses.

Evolution and Membership

Origin: The acronym BRIC was coined in 2001 by Jim O’Neill (Goldman Sachs) to highlight emerging economies.
Summits: First formal BRIC Summit held in 2009 (Russia); South Africa joined in 2010, making it BRICS.
Members (11): Brazil, Russia, India, China, South Africa plus Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, UAE.

Institutional Framework of BRICS

New Development Bank (NDB):
- HQ: Shanghai; Authorised capital: USD 100 billion.
- Supports infrastructure and sustainable development projects.
- All members are shareholders; India’s KV Kamath was the first President.
Contingent Reserve Arrangement (CRA):
- Size: USD 100 billion.
- Provides liquidity support during balance of payments crises.
Other Mechanisms:
- BRICS Business Council (private sector linkages).
- BRICS Think Tank Council (policy research).
- BRICS Payment System (under discussion) to reduce dependency on SWIFT.

Significance for India & Global Economy

Economic Clout:
- Collectively represented 35% of global GDP and 46% of world population prior to Indonesia’s entry discussion.
- Aims to enhance intra-BRICS trade and South-South cooperation.
Counterbalance to G7/Western blocs:
- Provides an alternative pole in global governance.
- Promotes multipolarity and reform of international institutions (IMF, World Bank, UN Security Council).
Strategic Value:
- Collaboration in energy (oil & gas), critical minerals, and technology.
- Increasing importance amid geopolitical realignments and sanctions regimes.

Tariffs—Key Facts in this context

50% tariffs reportedly imposed by the U.S. on India and Brazil (highest rung).
30% on China and South Africa; 19% on Indonesia (waivers for key agri items like palm oil, cocoa, rubber).
10% on Russia and Iran and other BRICS members at the lowest rung.
Core discussion themes expected: impact on global trade, responses to unilateral measures, and strengthening multilateralism.

Why it matters to India:

India’s export exposure to the U.S. in sectors like textiles, gems &jewellery, leather, engineering goods; tariff shocks hurt margins, jobs, MSME supply chains.
Policy levers: duty drawback/RoDTEP calibration, export credit support, market diversification (EU, West Asia, Africa, Latin America), and leveraging upcoming BRICS Chairmanship for consensus-building.