The Hindu Editorial Analysis- 12th November 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

The LAC agreement, the Détentes and the Questions

Why in News?

Two weeks after the unexpected announcement of a peace agreement between India and China, Prime Minister Narendra Modi and Chinese President Xi Jinping met on the sidelines of the 16th BRICS Summit in Kazan on October 23, 2024.

• Their meeting marked a significant step towards resolving tensions, as evidenced by the exchange of sweets between the Indian Army and the People’s Liberation Army (PLA) at the Line of Actual Control (LAC).
• This gesture shows that both sides are keen to move past the difficulties experienced over the last four years.
• If they can truly set aside their differences, there are many important topics to discuss, including:
  • Restoring peace at the border
  • Ending economic restrictions imposed on each other
  • Facilitating investments and visas
  • Allowing direct flights between the two countries
  • Increasing trade and other forms of interaction

Key Points of the Summit

• Strengthening Multilateralism: The declaration focuses on enhancing multilateral cooperation for just global development and security. It reflects a commitment to fostering peace, ensuring a fairer international order, and promoting sustainable development. 
• Payment System: Russia highlighted the need for a BRICS-led payment system as an alternative to SWIFT, especially in light of Russian banks being cut off from this international financial network in 2022. 
• West Asia Situation: The escalating situation in West Asia was also a point of emphasis during the discussions. 
• BRICS Initiatives: The member nations agreed to explore various initiatives, including the BRICS Grain Exchange and the BRICS (Re)Insurance Company.
• BRICS Partner Country Category: The summit endorsed the creation of a BRICS Partner Country category, allowing other nations to collaborate with BRICS on various projects. 
• BRICS R&D Vaccine Center: An announcement was made for the establishment of a BRICS R&D Vaccine Center to foster research in vaccine development. 
• International Big Cats Alliance: India’s initiative to create an International Big Cats Alliance was recognized during the summit. 

What is BRICS?

BRICS is a group of five big, fast-growing countries: Brazil, Russia, India, China, and South Africa.   The name BRICS comes from the first letters of these countries. 

• Origin of the Term: The term "BRIC" was first used by a British economist named Jim O'Neill in 2001 to highlight the potential of these emerging economies. 
• Formation and Meetings:  The BRIC group started holding annual meetings in 2006 during the UN General Assembly (UNGA) because of its growing importance.  These initial meetings were successful and led to formal summits. 
• Official Summits: BRICS countries have been meeting at formal summits every year since 2009. 
• South Africa's Inclusion: South Africa joined the group in 2010, and the group then became known as BRICS. 
• Expansion of BRICS: Recently, BRICS has expanded to include six new countries: Argentina, Ethiopia, Egypt, Iran, Saudi Arabia, and the United Arab Emirates (UAE). 

• It unites five of the largest developing countries in the world.
• These countries together represent about 41% of the total global population.
• They account for approximately 24% of the world's GDP (Gross Domestic Product).
• These nations also contribute around 16% of the total global trade.

Significance of BRICS for India

• Strengthening South-South Cooperation: India sees BRICS as a platform to enhance teamwork among developing countries, helping to ensure their opinions are heard in major global organizations like the UN and the World Bank. 
• Balancing Global Power:BRICS acts as a counterweight to Western-led groups like the G7. For India, this is important as it allows them to broaden their international relationships and lessen their reliance on Western nations. 
• Trade Diversification:BRICS encourages economic collaboration, trade, and investments among its member countries. 
• New Development Bank (NDB): This bank gives BRICS nations access to financial resources for infrastructure and sustainable development projects, which aligns with India's goals for growth. 

Challenges

• Different Priorities: India is worried about terrorism and border security, while other BRICS countries like China and Russia might focus more on their own regional interests. 
• Geopolitical Rivalry: China’s growing influence in BRICS, especially with new members like Iran and Saudi Arabia, raises concerns for India. There is a fear that BRICS might become more pro-China. 
• Complex Middle Eastern Relationships: The inclusion of Iran, Saudi Arabia, and the UAE in BRICS complicates India’s relationships in the Middle East. 
• Trade Barriers: There are still intra-BRICS trade barriers such as tariffs, regulatory differences, and currency issues. These barriers limit India’s ability to fully benefit from trade opportunities within the group. 

Way Ahead

•  India's participation in BRICS is vital for both its national interests and for influencing global governance in a rapidly changing geopolitical landscape. 
•  As a founding member, India has played a significant role in ensuring that BRICS remains a platform for emerging economies to collaborate and assert their influence globally. 
•  BRICS offers India a unique chance to diversify its trade networks, attract foreign investments, and engage in joint infrastructure and development projects. 
•  To maximize these opportunities, India should strategically use the resources of the New Development Bank (NDB) to finance critical projects that align with its long-term growth objectives.