India, Trump’s Tariffs and the Future of BRICS

The BRICS alliance (Brazil, Russia, India, China, South Africa) and the newly expanded BRICS Plus nations – Egypt, Ethiopia, Iran, UAE, Indonesia – stands as a formidable voice for the Global South, representing 31.5% of global GDP and over 40% of the world’s population.

India’s pivotal role in this coalition is not merely economic but a testament to its vision for a multipolar world order rooted in equity, sovereignty and mutual prosperity. Recent remarks by US President Donald Trump and Commerce Secretary Howard Lutnick – threatening 100% tariffs on nations exploring alternatives to the US dollar and urging India to reconsider its BRICS membership – have ignited global discourse.

At this juncture, India need to remain steadfast, leveraging its strategic autonomy to balance global partnerships while advancing its economic ambitions.

Trump’s tariff threats

Since November 2024, President Trump has cautioned BRICS nations against de-dollarisation, warning of crippling tariffs if they pursue a common currency or an alternative financial system. The US dollar’s dominance in over 90% of global transactions underscores Washington’s unease, particularly as Russia and Iran, constrained by SWIFT sanctions, advocate for local currency trade.

India’s response, articulated by Union external affairs minister S. Jaishankar, reflects pragmatism. India is not leading de-dollarisation but seeks practical 'workarounds' to sustain trade with sanctioned partners, such as Russia for critical oil imports.

India’s trade with the US is valued at $120 billion in 2024, with IT services, pharmaceuticals and textiles as key exports. Yet, BRICS offers a vital platform to diversify economic partnerships, reducing reliance on any single market and insulating India from external pressures. This strategic diversification is not a rejection of the US, but a calculated step toward resilience in a volatile global landscape.

The strategic imperative of staying in BRICS

India’s commitment to BRICS embodies its pursuit of strategic autonomy in a multipolar world, prioritising economic diversification and global cooperation over geopolitical rivalries. The bloc’s 2024-2025 expansion to include Egypt, Ethiopia, Iran, UAE and Indonesia amplifies India’s economic diplomacy.

For instance, India’s construction sector (7.4% growth in 2025) can drive infrastructure projects in Egypt, while its textile expertise can bolster Ethiopia’s burgeoning garment industry. In the UAE, BRICS Chamber of Commerce & Industry's
(CCI’s) trade corridors have catalysed regional fintech and renewable energy partnerships, leveraging India’s leadership in UPI and green hydrogen ambitions. These collaborations not only diversify India’s trade but also create a buffer against potential tariff disruptions from the US tariffs.

BRICS also serves as a platform to tackle pressing global challenges, from climate change to digital transformation. By championing local currency trade – such as India’s rupee-based settlements with Russia since 2022 – BRICS CCI ensures trade continuity without directly challenging the dollar’s dominance. This pragmatic approach underscores India’s ability to navigate complex global dynamics while advancing its economic interests. 

Navigating the challenge

India’s response to US tariff threats must balance its deep economic ties with Washington while reinforcing its BRICS commitments. This delicate balancing act requires a multifaceted strategy:

• Deepen US-India Economic Engagement: India should pursue reciprocal trade agreements, building on past negotiations for a limited trade deal. India can attract US investment in high-tech sectors like semiconductors and clean energy, fostering mutual trust and reducing tariff risks.
• Amplify BRICS Trade Platforms: Initiatives like the BRICS Startup Forum and MSME Accelerator Program can drive transformative deals in renewables with the UAE, pharmaceuticals with South Africa, and agrotech with Brazil. These platforms showcase BRICS’ economic value, fostering collaboration without escalating currency disputes.
• Advance Pragmatic Currency Solutions: India’s rupee-based trade mechanisms offer a blueprint for BRICS nations to ensure trade resilience. By scaling these systems, India can facilitate seamless commerce while sidestepping provocative moves toward a common BRICS currency.
• Leverage BRICS Plus Opportunities: The expanded BRICS bloc unlocks new markets for India. Intensifying infrastructure deals with Egypt, textile exports to Ethiopia, and energy partnerships with Iran reduces India’s dependence on traditional markets, enhancing its economic agility.
• Strengthen Diplomatic Messaging: India’s leadership must consistently emphasise that BRICS is a platform for cooperation, not confrontation. By positioning itself as a bridge between the Global South and North, India can defuse tensions while amplifying its global influence.

India’s Path Forward

The US tariff threat highlights the complexities of a shifting global order, but it also underscores India’s unique position as a global leader. With a $4.1 trillion economy in 2025, India’s economic resilience is undeniable. Its diversified trade portfolio –spanning BRICS, ASEAN, and Western markets – equips it to withstand external pressures. 

India must impress upon the US that BRICS is not a rejection of the West but a bold reaffirmation of a fair, multipolar world, where cooperation triumphs over coercion. By deepening BRICS partnerships, scaling innovative trade mechanisms, and maintaining robust dialogue with the US, India can navigate this challenge with strategic resolve. If India wants to emerge as a champion of the Global South, it need not merely respond to global shifts, it ought to shape them.

The author is Chairman of the BRICS Chamber of Commerce and Industry (BRICS CCI).

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