A payment system can move money faster. It cannot manufacture exports, correct a trade imbalance or create strategic trust where little exists.
That is the central contradiction confronting India as it prepares to put greater financial integration among BRICS economies on the table at the September 12-13 Leaders’ Summit in New Delhi. India is reportedly pushing a Reserve Bank of India proposal to connect the central-bank digital currencies (CBDCs) of BRICS members, potentially creating faster and cheaper channels for settling cross-border transactions. But behind the technological promise lies a much larger economic problem: India’s merchandise trade deficit with its BRICS partners reached $226.1 billion in FY2026.
The numbers expose the challenge. India imported goods worth $321.8 billion from its ten BRICS partners in FY2026 while exporting only $95.7 billion, according to trade data cited in recent analyses. BRICS countries accounted for about 42% of India’s merchandise imports but only around 22% of exports. The deficit has more than tripled from $74.5 billion in FY2021.
China is at the heart of the imbalance. India’s deficit with China alone stood at about $112.16 billion in FY2026. The deficit with Russia exceeded $50 billion, largely reflecting energy imports, while India also ran deficits of $26.53 billion with the UAE, more than $20 billion with Saudi Arabia and $15.8 billion with Indonesia.
This is why the CBDC proposal should not be viewed simply as a fintech initiative.
According to Reuters, the Indian proposal would build upon the 2025 Rio de Janeiro declaration, which encouraged interoperability between BRICS payment systems. India’s objective is not to create a common BRICS currency or overthrow the dollar. The more pragmatic ambition is to connect sovereign digital currencies so that trade can be settled more efficiently, reducing transaction costs and dependence on multiple intermediary banks.
That distinction is crucial. New Delhi has little interest in allowing BRICS to evolve into an explicitly anti-dollar or anti-Western financial coalition. Its preferred model is one of additional payment options rather than replacement of the existing international monetary architecture.
There is considerable logic in that approach. Prime Minister Narendra Modi has separately called for greater international integration of India’s UPI ecosystem. UPI processed 24.51 billion transactions worth roughly $314 billion in August 2026, according to Reuters, demonstrating the scale India has achieved in digital payments domestically.
But wholesale cross-border settlement between sovereign economies is considerably more complicated.
If India continuously imports substantially more from another BRICS economy than it exports to it, bilateral settlement in national currencies eventually creates accumulated balances. Somebody must be willing to hold those currencies, recycle them into investments or convert them. That is why currency-swap arrangements and deeper financial markets become important. Reuters reported that such swap arrangements would be required to manage trade imbalances before a CBDC linkage could become operational on a meaningful scale.
From BRIC to an expanded economic coalition
The present debate comes two decades after BRIC emerged as a political forum. The first foreign ministers’ meeting took place on the margins of the UN General Assembly in 2006, while the first leaders’ summit was held in Yekaterinburg, Russia, in 2009. South Africa joined in 2011, turning BRIC into BRICS.
The grouping gradually moved beyond diplomatic coordination. At the 2012 New Delhi Summit, members discussed creating a development bank. Two years later, at Fortaleza, they established the New Development Bank and the Contingent Reserve Arrangement. The NDB was created with authorised capital of $100 billion to finance infrastructure and sustainable development projects.
BRICS has since undergone a dramatic expansion. It now brings together Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the UAE, Saudi Arabia and Indonesia. That expansion gives the grouping considerably greater economic and geopolitical weight—but also makes consensus harder.
The September 12-13 New Delhi summit will demonstrate both tendencies. BRICS countries have strong incentives to deepen economic cooperation at a time when wars, sanctions, tariffs, supply-chain disruptions and geopolitical rivalry are fragmenting the international economy. Yet the bloc contains its own strategic contradictions. Iran-UAE financial tensions are one immediate obstacle to closer integration, while India remains cautious about linking sensitive financial infrastructure with Chinese-controlled systems.
The answer, however, cannot be less economic engagement. BRICS economies need more trade, investment, connectivity and financial cooperation precisely because the international environment has become more unpredictable.
For India, the priority should therefore be to transform BRICS trade from an overwhelmingly import-driven relationship into a more balanced economic partnership.
Commerce and Industry Minister Piyush Goyal has already called for predictable rules, digital trade documentation and greater services trade among BRICS members. These are potentially more consequential for India than the symbolism of creating alternative financial architecture.
India needs greater market access for pharmaceuticals, automobiles, engineering goods, electronics, agricultural products and services across BRICS economies. Payment interoperability should be accompanied by mechanisms for removing non-tariff barriers, recognising standards, facilitating logistics, expanding services trade and creating stronger production networks.
Without that transformation, faster settlement could simply make it easier to finance an already asymmetric trading relationship.
There is also a larger geopolitical calculation. India cannot afford to interpret deeper BRICS cooperation as a choice between BRICS and the West.
The United States remains critical for Indian technology, investment, defence cooperation and exports, and India and Washington are currently working towards a bilateral trade agreement. At the same time, the European Union is already India’s third-largest trading partner; India-EU trade in goods and services reached €185 billion in 2025, according to the EU.
India therefore needs an architecture of multiple partnerships rather than exclusive alignments.
It can deepen economic engagement with Russia, Brazil, China, the UAE and other BRICS members while simultaneously expanding trade, technology and investment relationships with the United States and Europe. That is not strategic ambiguity. It is strategic diversification.
The proposed BRICS CBDC bridge fits into that philosophy only if it remains voluntary, secure and commercially driven. It should complement the dollar-based system rather than become an ideological project to dismantle it.
The real test of the New Delhi summit, therefore, is not whether BRICS can devise another payment mechanism. It is whether the grouping can generate enough trust and economic reciprocity to make such mechanisms worthwhile.
For India, the $226.1-billion deficit is the warning written across the balance sheet. Digital currencies can change how trade is settled. Only competitiveness, market access and deeper two-way economic integration can change what is being traded—and in whose favour.
