CII calls for improved trade among BRICS nations

The Confederation of Indian Industries (CII) has called for deepening of trade and economic ties among the BRICS (Brazil, Russia, India, China and South Africa) countries, particularly in the areas where there are clear complementarities such as energy, IT, pharma and agro-business. 

“Indian industry attaches great importance to its economic and trade engagement with BRICS nations. The Indian industry sees significant potential of cooperation among BRICS nations in the field of services, particularly in clean & renewable energy technologies”, said Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), on the eve of the fourth BRICS Summit at New Delhi, which begins here on Wednesday.

 

Energy security is vital for India and other BRICS nations for its future growth and development, Banerjee further added.  

New Delhi is all set to play host to world leaders that include Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, South African President Jacob Zuma and Chinese Premier Hu Jintao.

The BRICS nations have acquired an important role in the world economy as producers of goods and services, and receivers of capital. They represent more than a quarter of the Earth's landmass, over 41 per cent of its population, almost 25 per cent of world GDP. There is no doubt about the increasing economic and geopolitical importance of these countries on the international arena.

The BRICS grouping has shown strong economic performance in the face of the recent global downturn. The BRICS nations were amongst few countries that were able to come out of the global recession in a short span of time. The global economic crisis has also intensified south-south trade and highlighted its importance in the face of the economic downturn in the two most important poles of world trade – US and Europe.

While BRICS countries’ trade with the world is growing, barring India-China intra-BRICS trade is very low. In 2010 only 8.6% of exports were traded among the nations themselves. The corresponding figure for imports was 11.58%. As regards services China and India are major exporters of services. The differences in the composition of services exports among BRICS nations indicate a strong scope for trade. The sectors where huge trading potential lies include travel, transport, IT and ICT, construction, and other business services.

Political stability alongside the fast economic growth has made the BRICS nations attractive destinations for foreign investment. China, Brazil, Russia and India are among the top 5 host economies for global FDI attracting more than US$20billion annually. However, inflows of FDI into some of these countries have seen a decline in recent years due to the global economic downturn. As most of the outward FDI from these countries flows to other developing countries, there is scope for intra-BRICS engagement through cross border investments in services.

At last Summit in Sanya in 2011, BRICS leaders agreed to “strengthen financial cooperation” among their individual development banks. At New Delhi Summit, CII would like to urge BRICS leaders to look into the operational modalities for establishment of financial institutions such as a Development Bank or a common Investment Fund.