The Expansion of BRICS Plus in Global Trade and Its Impact on the Economic Order

The BRICS Plus group, now comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, the United Arab Emirates, Saudi Arabia, and Ethiopia, is emerging as one of the most significant economic and political alliances in the world. Established to enhance economic cooperation, reduce reliance on the Western-dominated financial system, and foster a more equitable global trade framework, BRICS Plus has gained considerable influence following its expansion in 2024. This article explores the role of BRICS Plus in global trade, its efforts to challenge the dominance of the US dollar, and its geoeconomic impact on the global order.

Background and Expansion of BRICS Plus

BRICS was initially formed in 2006 with Brazil, Russia, India, and China, with South Africa joining in 2011 to complete the original BRICS framework. At the 2023 Johannesburg Summit, the group invited Iran, Egypt, the UAE, Saudi Arabia, and Ethiopia to join, with full membership effective from January 2024, forming what is now known as BRICS Plus. This expansion has positioned BRICS Plus as a key player in the global economy, representing approximately 45.2% of the world’s population, 33.9% of the world’s land area, and 36.7% of global GDP (based on purchasing power parity). These figures underscore the group’s immense potential to reshape global trade dynamics.

Trade Relations in BRICS Plus

A primary objective of BRICS Plus is to strengthen intra-group trade using national currencies instead of the US dollar. This strategy has been driven by Western economic sanctions, particularly against Russia and Iran. For instance, in 2024, Russian President Vladimir Putin announced that 90% of Russia’s trade settlements with BRICS countries were conducted in national currencies. This shift has reduced reliance on international financial systems like SWIFT and paved the way for alternative payment mechanisms.

One of the key initiatives of BRICS Plus is the introduction of the BRICS Pay digital payment platform, unveiled at the BRICS Business Forum in Moscow in October 2023. BRICS Pay enables cross-border transactions without traditional intermediaries, reducing transaction costs and enhancing trade efficiency among member states. This platform is particularly significant for countries like Iran and Russia, which face Western sanctions, as it allows them to conduct financial transactions independently of Western-controlled systems.

Role of New Members in Strengthening Trade

The inclusion of Middle Eastern and African nations in BRICS Plus has significantly bolstered the group’s trade potential. Egypt, Ethiopia, and Saudi Arabia’s control over the Suez Canal, a critical global trade route, has increased BRICS Plus’s influence over more than 12% of global trade flows. Additionally, the presence of Iran, Saudi Arabia, and the UAE as major oil exporters has strengthened the group’s position in global energy markets. Reports suggest that if Saudi Arabia fully confirms its membership, BRICS Plus could control up to 42% of global oil supply.

Iran, as a new member, plays a pivotal role in developing international transit corridors. Its strategic geographic location, connecting the Caspian Sea, the Persian Gulf, and the Indian Ocean, facilitates the creation of trade routes like the North-South Corridor. This corridor enhances trade flows between China, India, and other BRICS members, reducing dependence on Western-controlled trade routes.

Challenges and Obstacles

Despite its potential, BRICS Plus faces several challenges. A significant obstacle is the rivalry between China and India, which view each other as strategic competitors. Since 2020, India has implemented multiple anti-dumping measures against China, highlighting trade tensions within the group. Additionally, intra-BRICS trade (excluding China) remains limited, with China dominating the group’s trade dynamics.

Furthermore, external pressures, such as US tariff threats under President Donald Trump in 2025, pose challenges. Trump has threatened to impose an additional 10% tariff on exports from BRICS-aligned countries to the US, which could impact members like India and Brazil, who remain dependent on the US market. These threats underscore the geopolitical tensions surrounding BRICS Plus’s rise.

Impact on the Global Order

BRICS Plus is actively working to reshape the global economic order through enhanced economic and financial cooperation. The New Development Bank (NDB), established in 2014, is a key tool for funding infrastructure projects. The NDB has invested over $33 billion in 96 projects across BRICS countries, and with the group’s expansion, it has begun financing projects in non-member states. This initiative challenges the dominance of institutions like the International Monetary Fund.

Moreover, proposals such as the creation of a BRICS grain exchange and cooperation in peaceful nuclear energy demonstrate the group’s ambition to establish an independent economic order. These efforts not only reduce reliance on the US dollar but also empower developing nations to resist unilateral Western policies.

Conclusion

BRICS Plus, with its expanded membership and focus on trade cooperation, is emerging as a formidable force in the global economy. By promoting the use of national currencies, developing alternative payment systems, and strengthening transit corridors, the group aims to reduce dependence on the Western-dominated financial system. However, internal rivalries and external pressures, such as US tariffs, could hinder its progress. The future success of BRICS Plus will depend on its ability to navigate these challenges and foster a unified economic front.

Source: ISNA – BRICS Plus to End Dollar Dominance