India’s BRICS moment: Building the bloc, funding the future

When leaders of the expanded BRICS grouping meet in New Delhi on September 12–13, they will confront a question that goes beyond the usual summit language about a changing world order: what, exactly, has BRICS built that can make a difference after the summit is over?

India’s answer, after a year in the chair, is substantial. The presidency has convened more than 350 meetings across 25 cities and produced around 20 sectoral outcomes.

The group now has 11 members and 10 partner countries, together representing about 49.5 per cent of the world’s population, 40 per cent of global GDP and 26 per cent of global trade.

Much of that work has been focused on practical cooperation — energy storage, smart grids, urban mobility, resilient agriculture, digital systems, trade facilitation, critical minerals and technology.

But there is a striking qualification running through much of the architecture: it is voluntary, non-binding and largely unfunded.

That tension may define India’s BRICS presidency. New Delhi has deliberately tried to make the grouping useful without turning it into an explicitly anti-Western bloc.

Yet usefulness ultimately depends on whether the mechanisms created during the year can mobilise capital, change trade incentives and help member countries navigate a more fragmented global economy.

For climate policy, the stakes are particularly high.

Building the infrastructure of cooperation

India’s approach has been to keep BRICS focused on areas where its members have obvious common interests, even when they disagree sharply on geopolitics.

That matters because the grouping contains both major energy producers and consumers, including Saudi Arabia, the United Arab Emirates and Iran, while also accounting for an estimated 40–50 per cent of global installed renewable energy capacity. It therefore sits at an unusual intersection of energy security and the clean-energy transition.

The chairship has tried to exploit that complementarity.

Energy ministers adopted BRICS Guiding Principles on Energy Storage and Smart Grids and launched a BRICS Digital Centre of Excellence for Smart Grids and Energy Storage. Cooperation has also been extended to hydrogen, biofuels, critical minerals and carbon capture.

The urban agenda has followed a similar logic. A BRICS Urban Mobility Hub, voluntary principles for climate-resilient urban infrastructure and an Urban Research and Knowledge Network are intended to put climate and disaster risks more firmly into urban planning.

Agriculture has become another area of institutional experimentation. BRICS has adopted principles on people-centric and community-based adaptation, as well as guidance on traditional and indigenous knowledge systems.

Centres of Excellence on agro-ecology, a Network on Digital Agriculture and BRICS AGRIN, covering seeds, germplasm and genetic resources, are intended to connect research, technology and agricultural practice across member states.

There is also a logistics supply-chain cooperation framework that explicitly includes environmentally sustainable and climate-resilient logistics.

Taken together, these initiatives amount to more than a collection of summit declarations. They are the beginnings of an institutional network through which countries can exchange expertise, coordinate standards and potentially develop joint projects.

But they remain beginnings.

The fine print is important: most of these mechanisms are voluntary and designed around knowledge-sharing, capacity-building and coordination. They do not create significant financial obligations for member states.

BRICS is therefore building convening capacity considerably faster than it is building financing capacity.

That distinction will matter when the bloc moves from discussing cooperation to implementing it.

Trade may be where the climate agenda is really decided

The most consequential development may have come not from the environment track but from trade.

At the 16th BRICS Trade Ministers’ Meeting in Jaipur on August 7, chaired by Commerce and Industry Minister Piyush Goyal, members adopted a Chair’s Statement and Outcome Document with four annexes. They reaffirmed support for a WTO-centred multilateral trading system while also advancing practical measures on trade finance, customs and global value chains.

Among the proposals was a study of a BRICS invoice-discounting mechanism intended to address part of the estimated US$2.5 trillion global trade-finance gap, particularly for smaller businesses. Members also agreed on guiding principles for assessing export-oriented MSMEs on the basis of cash flows rather than collateral.

A Global Value Chains Action Plan for 2026–2030 envisages a BRICS Technical Council and a joint study of global value chains. The grouping also adopted principles to facilitate digitally delivered services across borders, agreed an Authorised Economic Operator Action Plan and gave in-principle approval to a customs cooperation agreement.

On the surface, these may look like conventional trade facilitation measures. They are also climate measures.

The reason is increasingly straightforward: modern carbon-border regimes operate at the level of individual products and supply chains.

For an Indian steel, aluminium or manufacturing exporter, the ability to document emissions, demonstrate improvements and transmit credible product-level information can determine whether decarbonisation investments translate into market access. Harmonised standards, customs cooperation and better mapping of value chains can make that possible.

Without those systems, carbon-border mechanisms risk becoming disproportionately expensive for smaller exporters that lack the capacity to generate and verify detailed emissions data.

This is where BRICS’ MSME cooperation and trade-finance initiatives could become consequential. They will not remove carbon-border costs, but they could reduce some of the information and financing disadvantages facing smaller firms.

The Jaipur package therefore provides a potentially more durable foundation for climate-related trade than another political declaration opposing carbon tariffs.

AI, energy and the unresolved technology question

India’s BRICS presidency has also placed technology at the centre of the grouping’s development agenda.

Artificial intelligence, fintech, digital public infrastructure and data-driven systems feature prominently in the innovation track. The BRICS Network on Digital Agriculture, for instance, envisages AI-based decision-support systems, geospatial intelligence and IoT-enabled monitoring for farmers.

A BRICS Incubator Network, a proposed Startup Innovation Fund and a Science and Research Repository add to the emerging innovation architecture.

The climate applications are obvious. Digital public infrastructure can reduce transaction costs; AI and remote sensing can improve agricultural efficiency; smart grids can optimise electricity systems; and data platforms can help governments and businesses measure resource use.

But there is a major unresolved contradiction.

AI itself is energy-intensive. Data centres are becoming an increasingly important source of electricity demand in several BRICS economies, while much of the marginal electricity supply in India continues to come from coal.

A grouping seeking simultaneously to promote AI, digitalisation and energy security has yet to fully address the energy footprint of the technologies it is promoting.

That makes the energy-storage and smart-grid agenda particularly important. If BRICS wants to present itself as a platform for technological development in the Global South, it will increasingly have to reconcile digital expansion with the carbon intensity of the electricity systems powering it.

China’s role and the case for practical cooperation

The internal diversity of BRICS is often presented as its biggest weakness. It may also be the reason practical cooperation is possible.

Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, describes the grouping as practising “variable geometry” — cooperating where interests align even when countries disagree elsewhere.

Climate change, he argues, is one such area.

“In an era of growing global volatility, BRICS is at the forefront of practising ‘variable geometry’,” Li said. “Climate change is clearly one area where this diverse group has a shared interest.”

For India, one of the most promising possibilities is cooperation that moves beyond multilateral declarations towards projects involving several countries.

Dammu Ravi, former Secretary (Economic Affairs) in the Ministry of External Affairs, points to the complementary capabilities within BRICS: China’s capital, technology and critical-mineral capacity; India’s growing renewable-energy capabilities; Brazil’s experience with biofuels and flex-fuel technology; and Russia’s nuclear expertise.

“No single country can do these energy projects alone,” Ravi said. “If you want to achieve real scale in solar, wind, or hydro, you have to look beyond your own country.”

The opportunity, he argues, is to develop gigawatt-scale projects through trilateral or wider cooperation.

Such an approach would also give BRICS a practical role in the wider Global South. Ravi points to countries where electricity costs remain dramatically higher than in India and China, arguing that the combination of cheaper renewable technology, financing and de-risking mechanisms could unlock new markets.

The missing ingredient, in his view, is not technology alone but financing structures, government incentives, guarantees and reliable purchase arrangements.

That brings BRICS back to its central weakness.

The money problem

BRICS has a development bank. The New Development Bank has US$100 billion in authorised capital and about US$53.4 billion subscribed, while cumulative approvals stand at approximately US$42.9 billion across 139 projects.

The problem is not simply the size of its balance sheet. It is how effectively that balance sheet is being deployed.

At the end of 2024, the NDB reported US$8.1 billion in climate finance, equivalent to 23 per cent of its portfolio, or 30.8 per cent when COVID-19 emergency lending is excluded. Of that climate finance, US$6.5 billion went towards mitigation and just US$1.6 billion towards adaptation.

Project preparation is an even sharper bottleneck. The NDB’s Project Preparation Fund had received only US$9 million in contributions by the end of 2024, and its first grant agreement was worth US$252,300.

That is tiny relative to the scale of the infrastructure challenge facing BRICS economies.

The lending structure also limits the Bank’s ability to mobilise private capital. In 2024, 85.96 per cent of approvals were sovereign or sovereign-guaranteed.

The BRICS Multilateral Guarantees initiative, agreed at Rio and intended to be incubated within the NDB without additional capital, is therefore potentially significant. If it can reduce risks for private investors, it could address one of the principal constraints on clean-energy and infrastructure investment.

India’s next opportunity comes after its BRICS chairship. It will chair the NDB Board of Governors from 2027 and host the Bank’s annual meeting as it finalises its 2027–31 strategy.

NDB President Dilma Rousseff has indicated possible ambitions of raising the climate-finance share to 45 per cent, non-sovereign financing to 35 per cent and local-currency financing to 40–50 per cent.

Those numbers will matter far more than another set of voluntary principles.

Carbon borders coming faster than BRICS can negotiate them away

The pressure on exporters makes the financing question more urgent.

The European Union’s Carbon Border Adjustment Mechanism entered its definitive phase on January 1, 2026. The European Commission set the CBAM certificate price at €75.36 per tonne for the first quarter and €75.28 for the second. India has no economy-wide carbon price, while its Carbon Credit Trading Scheme is still developing.

Iron and steel account for roughly 90 per cent of India’s CBAM-covered exports to the EU by value.

The United Kingdom is due to introduce its own carbon border mechanism from 2027.

BRICS governments have been sharply critical of such measures. At the August 18 environment ministers’ meeting, members described CBAM as “unilateral, punitive, discriminatory and protectionist”. The 2025 Rio declaration had gone further, rejecting carbon-border mechanisms alongside measures involving deforestation, corporate due diligence and taxation.

The New Delhi summit will therefore offer an important test: does India seek to preserve that confrontational language, or does it move towards a more practical response focused on helping exporters adapt?

Opposition may be useful as a negotiating position. It does not, by itself, make an Indian product more competitive in a market where carbon content is increasingly being measured.

For Indian exporters, the more consequential domestic questions are whether India develops a credible carbon-pricing architecture, establishes reliable product-level emissions data and finalises a taxonomy capable of directing capital towards genuinely lower-carbon activities.

The road to Antalya

The significance of the New Delhi summit extends beyond BRICS.

COP31 opens in Antalya in November, with BRICS entering the negotiations as the largest single grouping of major emerging economies. What the bloc says on adaptation finance, just transition, carbon accounting and trade-related climate measures will influence what much of the Global South carries into those talks.

India’s presidency has therefore achieved something important: it has begun building the institutional plumbing through which cooperation could happen.

The harder task is converting that plumbing into flow.

If the New Delhi summit can attach financing to the new energy, agriculture and resilience mechanisms; make the NDB more capable of mobilising private capital; and use the trade architecture to help smaller exporters navigate carbon-border requirements, India’s chairship will have left BRICS materially stronger.

If not, the presidency risks becoming a case study in the limits of institutional proliferation without money.

Li Shuo’s assessment captures the larger opportunity. As Western climate leadership becomes less predictable, he argues, BRICS has a chance to become “a future engine of global climate action”.

The New Delhi summit will show whether the bloc is prepared to move from building the machinery to actually switching it on.

This article was written in partnership with Climate Trends, a research-based consulting and capacity building initiative that aims to bring greater focus on issues of environment, climate change and sustainable development.

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