India's trade deficit with BRICS on the rise, but key is export growth, say experts

Even as India is all set to host the 18th BRICS Summit in New Delhi on September 12 and 13, recent trends in the country’s trade with other BRICS members are drawing attention, with a sharp rise in the trade deficit overshadowing the growth in overall trade with the bloc’s 10 other members.

An analysis of India’s trade data by Delhi based think tank Global Trade Research Initiative (GTRI) shows that India’s trade with other BRICS member countries has doubled over the past five years, while its trade deficit with the bloc has tripled during the same period.

What does the trade data of BRICS bloc show?

However, widening trade deficit need not be a cause of concern, argues Foundation for Economic Development (FED), another Delhi based economic think tank, pointing out that a large share of the deficit stems from import of key raw materials, including crude oil, precious metals and drug intermediates.

Trade experts, however, want India to use the BRICS platform to emphasise the need for faster export growth, and back it with strong trade facilitation measures. Such measures, they argue, can help expand India’s trade not only with BRICS members but also with countries beyond the bloc.

While Brazil, China, Egypt, Ethiopia, Indonesia, Iran, Russia, Saudi Arabia, South Africa and the UAE are the other BRICS members, the trade deficit is primarily because of petroleum exports from UAE and Russia and industrial raw materials and capital goods exports from China.

According to GTRI analysis, India’s trade with BRICS went up from $203.1 billion in 2020-21 to $417.5 billion in 2025-26, while the trade deficit jumped from $74.5 billion to $226.1 billion during the same period. BRICS’ share in India’s imports rose from 35.2% to 41.5%, while its export share slipped from 22% to 21.7%, the think tank’s latest report says. It also notes that China, the UAE and Russia supplied almost 84% of India’s BRICS imports. Imports from China reached $131.6 billion, while those from Russia increased more than ten-fold to $55.4 billion.

“BRICS is becoming an increasingly important source of machinery, industrial inputs, energy and commodities, but it is not absorbing a comparable share of Indian exports. India should seek better market access in China, Russia and Indonesia, address non-tariff barriers, promote higher-value exports and reduce excessive dependence on a few BRICS suppliers”, Ajay Srivastava, founder, GTRI said.

The analysis also shows that BRICS countries export about $1.1 trillion to one another, equal to 18.8% of their combined global exports. They import $1.4 trillion from fellow BRICS members, representing 29.5% of their global imports. In other words, BRICS is more important to its members as a source of imports than as an export market.

How big is the problem of China weaponising its supply chain dominance?

“Looking at trade deficits country by country, or bloc by bloc, is the wrong way to think about trade. A bilateral or bloc-level deficit tells you nothing about whether trade is good or bad for India. For e.g India's BRICS imports are concentrated in things India needs (energy, gold, inputs/intermediate/capital goods, APIs) to manufacture goods (petroleum, phones, auto components, medicines) that it can export to US and EU at higher prices. So these imports are often net forex earning even if not directly from those countries”, Rahul Ahluwalia, Founder and Director of FED said.

According to him, China is a big problem, but not because of the deficit. “China sometimes attempts to use its position in the supply chain as a strategic actor. What we should use the BRICS Summit for is not to try and equalise trade, but to seek guarantees that China will behave responsibly and not disrupt supply chains for geopolitical aims", Ahluwalia added.