BRICS takes the lead in technological innovation rage

BRICS (Brazil, Russia, India, China, and South Africa) brings together five major emerging economies with a combined GDP of over $16.8 trillion, which is nearly 22.3 per cent of the global GDP valued at $75.54 trillion in 2016. The World Bank statistics show that BRICS contributed over 18 per cent of total global trade in 2015. As China and India continue to grow faster than the rest of the world, BRICS’s share of global trade is bound to rise in the future too. Further, recovery of Russia and Brazil is poised to boost BRICS’s trade growth. In addition, BRICS’s population, 43 per cent of the global population, remains a major driver of demand for goods and services; shaping BRICS-centric global trade.

BRICS emerged as an important multi-country trading group. From the first BRIC (Brazil, Russia, India, and China) Summit on June 16, 2009, in Yekaterinburg, Russia, to 9th BRICS Summit (2017) in Xiamen, China, the partnering countries have travelled a long distance. BRICS’s progress and partnership are founded upon sources of strength like “mutual respect and understanding, equality, solidarity, openness, inclusiveness and mutually beneficial cooperation”. Over the years, BRICS deliberated on a host of issues bothering global citizens. BRICS’s leaders have been collectively developing, implementing, and monitoring innovative solutions to address emerging and contemporary challenges. Besides, the BRICS think-tank puts enormous efforts to tackle challenges to sustainable development, energy access, and energy security.

It is heartening to see that energy remains a critical area for cooperation, collaboration, and mutual support from 1st BRIC Summit to the 9th BRICS Summit. More importantly, emphasis on renewable energy with continued focus on fundamental research on technology development, easy and faster technology transfer and investments would immensely benefit BRICS and the world in the long run.

Focus on new and renewable sources of energy with decentralised generation and distribution through micro-grids could help millions of people to move out of economic impoverishment and energy poverty.

The decision to strengthen BRICS-led research in the emerging fields of ICT, Big Data, Data Analytics, Nanotechnology, Artificial Intelligence and 5G and their innovative applications is bound to benefit global communities at a large.

BRICS is committed to promoting peace and harmony within the group and beyond. In pursuance of this objective, BRICS has started taking a tougher stand on terrorism and is working on developing a mechanism to combat terror funding and counter-terrorism. In this area, BRICS needs to move beyond just declaring ‘terror groups’ and work towards eliminating terror-breeding epicentres. China’s support is much needed to ensure successful implementation of counter-terror strategies within BRICS.

BRICS acknowledges that trade plays a crucial role in the global economic growth and prosperity. Therefore, the BRICS Interbank Cooperation Mechanism continues playing an important role in supporting BRICS economic and trade cooperation. Recent agreement within BRICS to augment currency cooperation, including currency swap, local currency settlement and local currency direct investment, will propel trade growth and strengthen local currency. Possibly, this would multiply India’s exports with BRICS.

India’s export to Brazil, Russia, China, and South Africa (BRCS) came down from $27 billion in 2012-13 to $18 billion in 2016-17. During 2012-2017, India’s import from BRCS increased from $70 billion to $77 billion. India’s widening trade deficits with BRCS indicates that India serves as a good market for them. Especially, China is the biggest beneficiary of India’s expanding market, it enjoys a trade surplus of over $51 billion with India. Does BRICS offer any trade advantage to India?

Current situations demonstrate that on the trade front India offers a plenty to BRCS. In 2016-17, trade statistics point out that India runs trade deficits with BRCS, which means India’s market supports domestic manufacturing and services sectors of BRCS; on the contrary its own domestic manufacturing especially the small scale industries are gasping for breath. Possibly, due to lack of emphasis on promoting domestic manufacturing and pushing cost competitiveness in the previous decades, India’s domestic manufacturing has been adversely impacted.  India can capitalize on trade opportunities with BRCS only if the initiatives on domestic manufacturing succeed.

India must take pride in their scientists, innovators, engineers, and entrepreneurs. I am sure, these stakeholders will push India to the next level and the business leaders will provide enough to cheer about “Made in India” identity. Ongoing collective efforts from the government to business community would enable India to achieve a competitive & comparative advantage by 2025.

The author is the Head of Department of Management Studies at the Rajiv Gandhi Institute of Petroleum Technology