BRICS and New Development Bank (NDB)

Context: India participated in the 1st BRICS Finance Ministers and Central Bank Governors (FMCBG) meeting under the BRICS Russian Chairmanship. The agenda of the meeting included discussions on:

  • The outcomes of G20 (of which all BRICS countries are members) Saudi Presidency in 2020,
  • Russia’s initiative to develop a digital platform to encourage infrastructure investments and
  • Expansion of the membership of the New Development Bank.



  • BRICS is a group of five countries – Brazil, Russia, India, China and South Africa – with rapidly developing economies that cooperate on trade, finance, technology and other areas of mutual interest.
  • As a formal grouping, BRIC started after the meeting of the Leaders of Russia, India and China in St. Petersburg on the margins of G8 Outreach Summit in 2006.
  • The grouping was formalized during the 1st meeting of BRIC Foreign Ministers on the margins of UNGA in New York in 2006.
  • The 1st BRIC Summit was held in Yekaterinburg, Russia, on 16 June 2009.
  • It was agreed to expand BRIC into BRICS with the inclusion of South Africa at the BRIC Foreign Ministers’ meeting in New York in September 2010.
  • Accordingly, South Africa attended the 3rd BRICS Summit in Sanya, China in April 2011.
  • BRICS now brings together five economies accounting for 42% of the world’s population, 23% of the global GDP and an around 17% share of world trade.
  • The BRICS cooperation has two pillars —
  1. Consultations on issues of mutual interest through meetings of leaders and ministers, and
  2. Cooperation through meetings of senior officials in areas including trade, finance, health, education, technology, agriculture, and IT.
  3. China introduced the “BRICS Plus” format at the 9th Xiamen summit in 2017 by inviting a few countries from different regions.

11th BRICS Summit

  • In November 13-14, 2019, Brasilia hosted the 11th BRICS Summit under its chairmanship.
  • The main pillars of cooperation — political, economic and humanitarian. 
  • The group accounts for almost a third of global GDP at purchasing power parity.
  • BRICS even outperformed the G7 on this indicator.
  • The New Development Bank (NDB) created by the BRICS countries is one of the promising multilateral development institutions.
  • The BRICS Contingent Reserve Arrangement (CRA) has a total capital of $100 billion and is to be a guarantor of the BRICS financial stability in case of crisis.
  • Recently, India also put forward a proposal to host a BRICS workshop on digital forensics in India.
  • Brazil has also made terrorism one of the priorities for its presidency.
  • Following up on the decisions taken at the previous summit, operationalisation of the Partnership on New Industrial Revolution is underway.
  • It is focused on cooperation in digitalisation, industrialisation, innovation, inclusiveness and investment. 
  • In 2020, Russia took the helm of BRICS and India in 2021.
  • The 11th BRICS Summit in Brasilia was an opportunity for India to lay the groundwork for hosting the 2021 Summit scheduled in India.
  • The last Summit took place in Goa in 2016.
  • India will also be mindful of the fact that the G20 Summit to be hosted in India will take place in 2022, and this will be an opportunity to synergise the two agendas from New Delhi’s lens as well.
  • Where BRICS has failed its founders is in the vision of interdependence between the five countries; despite their combined population accounting for 40% of humanity, intra-BRICS trade still makes up just 15% of world trade.
  • Going forward, it is greater connectivity and more trade that will allow the BRICS countries to claim their rightful space, and provide the leadership and energy that the global economic order needs urgently.

BRICS Network University

  • The BRICS Network University (BRICS NU) is a network of the BRICS member countries’ higher education institutions engaged in cooperation and joining the BRICS NU.
  • The network university is devoted to the creation of masters and PhD programmes.
  • Six agreed priority areas – Computer science and information science, energy, BRICS studies, economics, ecology and climate change and water resources and pollution treatment.

New Development Bank (NDB)

  • The New Development Bank (NDB) is a multilateral financial institution established in 2015 by the BRICS countries (Brazil, Russia, India, China and South Africa).
  • Its purpose is to fund infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.
  • The Bank has an initial authorized capital of 100 billion dollars, and an initial subscribed capital of 50 billion dollars.
  • The NDB is not meant to challenge the Western banks, but rather to complement them.
  • The Bank has its headquarters in Shanghai, China and an Africa Regional Centre is being established in Johannesburg, South Africa and one regional centre in Brazil.

Fortaleza Declaration

  • During the sixth BRICS Summit in Fortaleza (2014), the leaders signed the Agreement establishing the New Development Bank (NDB).

How is the NDB governed?

  • The NDB was founded by the five BRICS countries, though membership is open to any member of the United Nations.
  • The Bank is governed by a Board of Governors made up of the finance ministers of the five BRICS countries and a Board of Directors.
  • Voting power within the Board is based on each country’s shares in the bank.
  • While new members can join the NDB, the five BRICS countries will retain a minimum of 55% of total shares and hence of the voting power.
  • At present, all the BRICS nations have equal share-holding and equal voting rights.
  • The NDB’s management includes a presidency that rotates among BRICS members, and four vice presidents who are selected from the remaining BRICS countries.
  • As of now, NDB’s approved loan proportion to India is 28%, the second-highest after China amongst the BRICS countries.
  • NDB aims to provide local currency financing options in its member countries and it is expected that NDB will be able to provide rupee financing in India soon.
  • NDB aims to support the Indian public and private sector for infrastructure development through innovative means such as loans in local currency, guarantees, credit enhancement and equity investments. Global Housing Technology Challenge-India.

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