BRICS has a financial Road-Map: The hard part is making it work

From Geopolitical aspiration to Economic reality 

By R Suryamurthy

The latest BRICS financial agenda is ambitious enough to suggest that the grouping is no longer content merely to complain about the inequities of the global economic order; it wants to build pieces of an alternative. But ambition, particularly in a grouping as diverse as BRICS, is cheap. The harder question is whether the bloc can convert a long catalogue of declarations on trade, payments, development finance, taxation, cyber resilience and institutional reform into mechanisms that businesses, banks, investors and governments actually trust and use.

That is the real test confronting BRICS as India’s 2026 chairship draws to a close and China prepares to take over in 2027.

Finance ministers and central bank governors meeting in Jaipur and Mumbai have put protectionism, reform of the International Monetary Fund and World Bank, local-currency settlements, cross-border payments and development financing at the centre of the agenda. The political message is unmistakable: emerging and developing economies are increasingly unwilling to accept a global financial architecture whose institutions, voting structures and operating assumptions were designed for a world that no longer exists.

That argument is difficult to dismiss.

The global economy has changed dramatically, but the distribution of institutional power has not changed at the same pace. Emerging markets account for a much larger share of global output, trade and investment than they did when the Bretton Woods institutions were created, yet their influence within those institutions remains constrained by legacy arrangements.

BRICS is therefore right to demand a faster implementation of quota reforms at the IMF, greater representation for emerging and developing economies and a more transparent, merit-based process for selecting the leadership of the IMF and World Bank.

But there is a danger in assuming that institutional reform will automatically follow from political declarations. It will not.

The established financial architecture has survived decades of criticism because power is embedded not merely in communiques but in capital, voting rights, reserve currencies, financial markets, regulatory systems and institutional credibility. BRICS can demand change, but unless it can demonstrate that its own institutions can deliver capital efficiently, transparently and at competitive cost, its reform campaign risks becoming another annual ritual.

That is why the most important part of the current agenda may not be the rhetoric on reforming Washington-based institutions but the quieter attempt to build practical financial infrastructure.

Cross-border payments could become the most consequential area of BRICS cooperation because this is where geopolitical aspiration meets commercial reality.

The bloc is working on interoperability between payment and messaging systems and on mechanisms that can facilitate greater use of local currencies in trade. This is a more sensible approach than rushing towards an artificial common currency or an overly ambitious BRICS-wide monetary instrument.

The attraction is obvious. If exporters and importers can settle more transactions directly in local currencies, they could potentially reduce conversion costs, shorten settlement chains and lower some exposure to external currency volatility.

But local-currency settlement is not a magic wand.

A currency becomes useful internationally not because governments declare that it should be used, but because businesses trust its stability, banks can provide liquidity, markets can hedge exposures and capital can move with reasonable predictability. If an Indian importer accepts payment in one BRICS currency but cannot efficiently hedge that currency risk, the theoretical advantage of bypassing another currency may quickly disappear.

Interoperability is therefore only the beginning.

BRICS will need common technical standards, reliable settlement mechanisms, regulatory coordination, cybersecurity safeguards and deep enough foreign-exchange markets to make the system commercially attractive.

If those pieces are missing, local-currency settlement will remain a political slogan rather than a financial revolution.

The same test applies to the New Development Bank.

The NDB has an opportunity to become the most tangible expression of BRICS’ ambition to strengthen development finance outside traditional channels. Its emphasis on local-currency lending, broader membership and project-preparation facilities points in the right direction.

Yet the institution cannot afford to become merely another multilateral development bank with a different membership list.

Its value will be measured by whether it can finance projects that traditional institutions struggle to finance, mobilise private capital, reduce borrowing costs and respond faster to infrastructure and development needs.

The proposed BRICS Multilateral Guarantees initiative could be particularly important. In developing economies, the problem is often not a shortage of potentially productive projects but the risk premium attached to them. If guarantees can reduce perceived risk and unlock institutional investment, BRICS would be creating something of genuine practical value.

The proposed investment platform faces an even bigger challenge. A study group and phased framework are useful beginnings, but investors ultimately need predictable rules, enforceable contracts, transparent governance and credible exit mechanisms.

Capital does not respond to communiques. It responds to risk-adjusted returns.

There is another uncomfortable issue that BRICS cannot escape: its own internal economic contradictions. The grouping brings together countries with different political systems, economic structures, financial regulations, currencies, strategic interests and relationships with the existing global order.

Some members are major exporters; others are commodity importers. Some have relatively deep financial markets; others remain heavily dependent on external capital. Some favour rapid de-dollarisation; others have powerful commercial reasons to retain the dollar’s central role.

This diversity is an asset when BRICS seeks to represent the Global South, but it becomes a liability when the bloc attempts to create common financial infrastructure.

Consensus is useful for political declarations. Financial systems require precision.

The bloc will therefore need to resist the temptation to equate the number of initiatives announced with the depth of integration achieved.

BRICS’ criticism of unilateral tariffs and non-tariff barriers is also justified, particularly as trade fragmentation threatens to raise costs for emerging economies.

But the bloc’s credibility will depend on whether it applies the same principles internally.

It is not enough to oppose protectionism when it is imposed by major Western economies while tolerating restrictive practices, opaque regulations or market-access barriers among BRICS members themselves.

The real opportunity is to make intra-BRICS trade easier, not merely to redirect it.

The Customs Mutual Administrative Assistance Agreement, the BRICS Authorised Economic Operator Action Plan and greater cooperation on taxation could help if they eventually reduce paperwork, improve information sharing and make cross-border compliance more predictable.

This is where the BRICS agenda could produce benefits that are far more immediate than another declaration on de-dollarisation.

The grouping’s growing attention to artificial intelligence, quantum computing and cyber resilience is equally important.

A financial system that becomes more digitally integrated also becomes more exposed to common technological vulnerabilities. Annual cyber exercises and secure information-sharing arrangements among central banks are therefore not peripheral initiatives; they are prerequisites for deeper financial connectivity.

The challenge, however, is to ensure that BRICS does not create a digital financial architecture faster than it can create the safeguards required to protect it.

AI can improve fraud detection, credit assessment and financial inclusion, but it can also amplify systemic risks, embed opaque decision-making and create new forms of cyber vulnerability. Quantum computing could eventually threaten existing encryption systems.

The bloc’s emerging-economy-centric approach to these technologies is therefore welcome, but it must lead to operational standards rather than another layer of policy papers.

China’s 2027 chairship will inherit an agenda that is both ambitious and unfinished.

India has helped move the financial discussion towards practical mechanisms, but the next phase will determine whether those mechanisms acquire institutional weight.

The central challenge for BRICS is not to build a parallel global financial system overnight. That would be unrealistic and, in many respects, unnecessary.

The smarter strategy is incremental: build interoperable payment corridors; expand local-currency financing where commercially viable; strengthen the NDB; develop credible guarantee mechanisms; improve customs and tax cooperation; and use the collective weight of the membership to push for reform of the IMF and World Bank.

In other words, BRICS does not need a financial revolution. It needs functioning alternatives where existing arrangements are demonstrably inadequate.

That distinction matters.

A bloc that announces a grand alternative but cannot make a cross-border payment cheaper, finance an infrastructure project more efficiently or give developing economies a stronger voice in global institutions will eventually lose credibility.

Conversely, a BRICS that quietly builds systems that businesses find useful could alter the global financial balance without ever announcing that it has created a new order.

The real measure of the 2026 agenda, therefore, will not be the length of the Joint Statement. It will be what survives after the speeches end.

BRICS has spent years arguing that the global financial architecture is unfair. It now has an opportunity to demonstrate that it can build something better. The burden of proof has shifted. The next chapter is not about declarations. It is about delivery. (IPA Service)