BRICS Summit Highlights: A Shift in Global Economic Power

The recent BRICS summit in Brazil highlighted significant shifts in global economic dynamics, with India participating while China and Russia were notably absent. The coalition, which includes emerging economies, is exploring trade in local currencies to challenge U.S. dollar dominance. With China leading the charge, the group aims to reshape global trade and finance, representing over half of the world's population and a substantial portion of the global economy. As the dollar faces its largest decline since 1973, the implications of these developments could redefine international economic relations.

By Narendra Chaudhary Jul 8, 2025, 12:14 IST

Overview of the BRICS Summit

The BRICS summit took place in Rio de Janeiro, Brazil, on July 6 and 7, with India's Prime Minister Narendra Modi in attendance. Notably, the leaders of China and Russia, Xi Jinping and Vladimir Putin, were absent from the meeting.

The BRICS Coalition

BRICS is an alliance of ten Global South nations, originally founded by India, China, Brazil, Russia, and South Africa. In 2024, five additional countries—Iran, Egypt, Ethiopia, the UAE, and Indonesia—are set to join. This coalition does not include any Western nations, yet it has attracted significant attention from the West, including the United States. The organization is viewed as a potential alternative to Western-dominated entities, which has raised concerns for U.S. President Donald Trump.

Challenging U.S. Dominance

Approximately 50% of global trade is conducted in U.S. dollars, establishing its status as a leading international currency. BRICS nations are exploring the possibility of conducting trade in their own currencies until a shared currency is established. China and Russia have already engaged in several agreements, and India has also reached a deal with Russia regarding oil transactions. Furthermore, BRICS is considering the creation of a common currency to facilitate trade among member countries.

China's Role in BRICS

Within BRICS, China emerges as a formidable economic force, aspiring to lead not just the Global South but the world at large. The country aims to promote trade in its currency, the yuan, among BRICS nations, although India's opposition has hindered this initiative. Currently, China accounts for about 15% of global trade, while the U.S. holds around 10%. A shift towards intra-BRICS trade in local currencies would directly challenge U.S. economic dominance.

Demographic and Economic Significance

BRICS encompasses developing nations, presenting vast opportunities for growth. Collectively, these countries represent 56% of the world's population and account for 40% of the global economy, giving them a significant edge over Western nations. This positioning reinforces the perception of BRICS as a viable alternative to Western-led organizations.

Decline of the Dollar

Prior to the BRICS summit, the U.S. dollar experienced a decline of over 10% this year, marking the most significant drop in the first half of any year since 1973. This decline mirrors the period when President Nixon shocked the world by decoupling the dollar from gold. The current downturn stands in stark contrast to the dollar's historical upward trends.