Business

India To Grow Trade With BRICS

The Indian government is trying to boost India's trade with BRICS, even as India gears up to host the 13th BRICS Summit in September. The Commerce Department is currently giving final touches to its internal reports, which pinpoint the areas where trade can be quickly ramped up between the nations of the grouping - Brazil, Russia, India, China and South Africa. Barring trade with China, India's trade with the 15-year-old grouping has not expanded nearly as much as New Delhi had hoped for. India hopes to fix this through a combination of targeted exports based on demand in these markets, and easing of customs, trade and standards rules, as well as a display of greater political will. India's total trade with the BRICS countries stood at US$ 110 billion in 2019-20 and rose to US$ 113.3 billion in 2020-21. India's trade figures for the grouping are heavily dictated by its trade with China (US$ 86.4 billion in FY21). "However, a pick-up in ocean trade in the latter part of FY21 meant that trade with Brazil and South Africa ended the year with small increases while that with Russia contracted to a much smaller degree than anticipated. This shows there are deep business linkages already in place, which just need to be expanded," a senior Commerce Department official said. In July, a 3-day meeting of the BRICS Contact Group on Economic and Trade Issues (CGETI) saw members deliberate on a series of proposals circulated by New Delhi. These focused on a non-tariff measures (NTM) resolution mechanism, a sanitary and phytosanitary (SPS) working mechanism and more cooperation on the multilateral trading system, among others. Sources said the other nations in the bloc are expected to finalise proposals dealing with the technicalities of trade before the next BRICS Trade Ministers' meeting, set to be held on September 3 and to be chaired by Commerce and Industry Minister Piyush Goyal. Targeted action The primary reason for the relatively low level of trade between India and the three BRICS nations, barring China, is due to their geographical distance, which, in turn, leads to high trade costs. Reducing this high cost is at the forefront of the government's plans. It is seeking to raise trade volumes through more business-to-business connections and promotion of Indian products in these nations. At the same time, New Delhi is actively advocating open and free trade, and the removal of tariffs wherever possible, sources said. Also, India's exports to both Brazil and Russia are heavily dependent on commodities, a trade that is highly volatile in nature, owing to sharp price fluctuations. For instance, India's major exports to Brazil include chemicals (organic or otherwise), while those to Russia include large amounts of agricultural products, chemicals, plastics and rubber. However exports to South Africa, the nearer of the three, have increasingly focused on finished goods such as pharmaceutical products, automobiles and heavy machinery. Overall, India is keen to provide more hand holding to companies operating in these sectors to further raise bilateral business. However, a key part of this plan continues to be missing as sources say that an agreement signed in November 2019 among trade and investment promotion agencies of the member nations to facilitate greater trade has seen scant movement.