The Brics+ group, including India, China, and Russia, is rapidly expanding in global trade, set to surpass the G7 by 2026. Their share of global exports surged from 10.7% in 2000 to 23.3% in 2023, while the G7's declined. Brics+ import share also rose. D.K. Srivastava predicts their export share may exceed the G7's by 2026, potentially reshaping global economic leadership. Geopolitical tensions drive Brics+ efforts to challenge G7 dominance and US dollar hegemony, promoting a more diverse currency landscape.
The Brics+ group, comprising nations like India, China, and Russia, is rapidly expanding its presence in global trade, poised to surpass the G7 by 2026, according to EY India's latest report, "EY Economy Watch." Over the years, the Brics+ share of global merchandise exports has surged from 10.7% in 2000 to 23.3% in 2023, marking a remarkable 12.6 percentage point increase. In contrast, the G7's share has dwindled by 16.2 percentage points during the same period, dropping from 45.1% to 28.9%.
Furthermore, the Brics+ group has also seen a significant rise in global merchandise imports, climbing from 7.2% in 2000 to 18.9% in 2023. Meanwhile, the G7's import share has declined from 49.8% to 33.7% over the same timeframe. The rest of the world's share has remained relatively stable, edging up slightly from 44.2% to 47.9% in exports and from 43.0% to 47.4% in imports.
The report highlights the escalating influence of the Brics+ nations on the global economy, suggesting that they are poised to both compete and collaborate with the G7 in shaping international economic policies. Against the backdrop of current geopolitical strains, the Brics+ alliance is actively working to align their strategies, potentially reducing the dominance of the US dollar in global trade and reserves, as well as challenging Western technological leadership.
D.K. Srivastava, Chief Policy Advisor at EY India, and a member of the 16th Finance Commission Advisory Council, predicts that with the growing trends and possible new members joining the Brics+ group, their share in global merchandise exports could surpass that of the G7 by 2026. This shift could raise questions about the G7's leadership in managing global economic affairs as the Brics+ nations, particularly India and China, gain prominence in global population, GDP, and trade.
China and India, key players in the Brics+ coalition, have notably risen in the ranks of global purchasing power parity (PPP), holding promising positions for the future. The EY analysis further underscores the rising significance of high-tech exports from Brics+ nations, showcasing their transition towards technology-driven products and their growing role in the global high-tech market.
In addition to trade developments, the currencies of Brics+ nations are gaining momentum in the global financial landscape. The Yuan has shown stability and slight appreciation, while the Indian Rupee has experienced fluctuations, particularly since 2018. Noteworthy is the decline in the US dollar's share as a global reserve currency, dropping from 71.5% in 2000 to 58.2% in 2024, signaling a potential move towards a more diverse currency framework.
As geopolitical tensions persist, the coordinated efforts among Brics+ members may challenge the existing dominance of the G7 and the US dollar, paving the way for a more multipolar global economic order. The Brics+ group is laying the groundwork for a new international trade and investment platform that could offer a cost-effective alternative to the current SWIFT system, alongside developing a trade and reserve currency supported by gold and other key commodities, as highlighted by Srivastava.
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