BRICS: A Diplomatic Reset

• ByStartupStory     |    September 9, 2026

BRICS today represents more than an economic grouping. It is increasingly becoming a symbol of a diplomatic reset against a global financial and political order that has remained heavily dominated by the United States and the Western powers for decades. The growing importance of BRICS reflects a strong desire among emerging economies to create alternatives to Western-controlled financial institutions, payment systems and international trade mechanisms.

The biggest turning point came after the Ukraine war, when Russian assets held in Western jurisdictions were frozen. For many countries, this created a serious question about the safety of foreign exchange reserves and the neutrality of the international financial system. The growing use of sanctions and the threat of secondary sanctions against countries maintaining economic relations with nations such as Iran further strengthened the perception that the dollar and Western financial systems could be used as geopolitical weapons.

For decades, dollar financing and the petrodollar system were considered normal and unquestionable. The dollar was accepted as the natural currency of international trade. However, recent geopolitical developments have encouraged countries to search for alternatives. The objective is not necessarily to eliminate or replace the dollar, but to ensure that countries have other options and are not completely dependent on a financial system influenced by Washington and its Western allies.

No Common BRICS Currency

Despite frequent discussions, there is unlikely to be an immediate consensus on a common BRICS currency. The member countries have very different monetary policies, economic structures, inflation levels and exchange-rate systems. More importantly, every country has a different relationship with the United States and the West, which needs to be carefully balanced.

India, for example, has strong strategic and economic relations with the United States while simultaneously maintaining its commitment to BRICS and strategic autonomy. Brazil, South Africa, China and Russia also have different priorities and economic interests.

There is another important concern. Smaller economies may fear that larger economies would have greater control over a common currency or financial institution. Countries contributing more capital could potentially demand greater influence over decision-making. Therefore, monetary sovereignty remains a sensitive issue.

Instead of creating one common currency, BRICS is more likely to focus on strengthening local currencies and independent financial mechanisms.

Independent Development Financing

The establishment of the New Development Bank in 2015 was an important step towards creating an alternative source of development finance. The larger idea now being discussed in BRICS and SCO diplomacy is to create stronger and more independent financing mechanisms capable of providing development loans in local currencies.

This idea could be particularly important for infrastructure projects. For example, if India requires funding for development work at Chabahar Port or for reviving regional connectivity projects such as TAPI, financing could potentially be arranged through local currency mechanisms rather than depending entirely on dollar-based institutions.

Such arrangements could reduce exposure to Western sanctions and minimise dependence on international payment mechanisms such as SWIFT. The objective would be to create a parallel financial option where legitimate development projects can receive funding without excessive geopolitical pressure.

Local Currency Trade and Trade Balance

The most practical objective for BRICS is increasing trade in national currencies. The upcoming discussions are likely to focus on creating consensus for a significant share of intra-BRICS trade to be settled in local currencies.

However, this cannot succeed without addressing trade imbalances.

For bilateral trade in local currencies to work effectively, countries need to create balanced commercial relationships. If one country continuously exports far more than it imports, the importing country may accumulate large amounts of another country’s currency without sufficient opportunities to use it.

Therefore, trade diversification is essential.

India, for example, can gradually diversify some imports away from China towards other BRICS countries and partners. Similarly, other BRICS members can restructure their imports and exports to reduce excessive trade deficits and create a more balanced economic network.

The increasing participation of large business delegations in BRICS meetings demonstrates that commercial diplomacy will be central to this process. BRICS cannot become a successful economic alternative merely by changing the currency used for trade. It must also create new supply chains, markets and business partnerships.

Russia’s energy trade with India provides an example of changing economic relationships. India imports Russian crude oil and exports refined petroleum products to global markets. Similar opportunities exist in iron, steel, energy, agriculture, pharmaceuticals and technology.

BRICS Pay and Digital Payments

While a common BRICS currency remains unlikely, an independent cross-border payment mechanism could become a reality. BRICS Pay could provide a platform for trade settlements without excessive dependence on the dollar or Western-controlled financial networks.

India’s UPI has already demonstrated the power of modern digital payment infrastructure. China’s CIPS, Brazil’s PIX and other national payment systems could potentially be connected through common technical standards.

Central Bank Digital Currencies, or CBDCs, could also play an important role. The Reserve Bank of India can contribute significantly to developing secure cross-border digital settlement mechanisms.

The future could involve technical integration between systems such as UPI, CIPS, PIX and CBDC platforms, allowing businesses to make cross-border payments directly and efficiently.

A Multipolar Financial Future

BRICS is not likely to eliminate the dollar. Trade with the United States will continue in dollars, while trade with Europe may continue in euros. However, trade among BRICS countries can increasingly take place in local currencies and through independent digital payment systems.

The real objective is not to replace the dollar but to end the absence of alternatives.

BRICS represents the growing demand for financial sovereignty and a multipolar world. Its success will depend not on creating one common currency, but on building balanced trade, independent development financing and secure cross-border payment mechanisms.

The BRICS diplomatic reset may therefore not begin with a new currency. It may begin with something more important: the freedom of nations to choose how they trade, finance development and conduct international business without living under the constant shadow of Western sanctions.

Article researched and written by Mayank Sati

Follow Startup Story