India's BRICS trade surges to $416 billion, but widening deficit raises policy imperative ahead of 2026 Summit

India's total trade with BRICS nations reached $416 billion in CY2025, a substantial increase from prior years driven by a surge in imports. However, the goo...

What Happened

India's total trade with BRICS nations reached $416 billion in CY2025, a substantial increase from prior years driven by a surge in imports.
However, the goods trade deficit with BRICS nearly doubled to $224 billion — imports grew at a 12% CAGR while exports grew at only 3% CAGR since CY2021.
Cumulative imports from BRICS stood at $320 billion in CY2025 (43% of India's total imports, up from 36% in CY2021); exports to BRICS were $96 billion.
China is the single largest contributor to the deficit (over $100 billion), followed by Russia ($55 billion — primarily crude oil imports).
Russia's imports grew at a 61% CAGR since 2021, almost entirely driven by discounted crude oil purchases following Russia's 2022 conflict with Ukraine.
India is pressing BRICS partners for solutions to the trade imbalance ahead of the September 2026 BRICS Summit under India's chairship.

Static Topic Bridges

Balance of Trade and Current Account Deficit

In international economics, the trade balance is the difference between a country's exports and imports of goods. A trade deficit occurs when imports exceed exports. The current account — a broader measure — includes the trade balance plus services, primary income (investment returns), and secondary income (remittances). India has historically run a current account deficit (CAD), partly offset by remittances (India is the world's largest recipient) and services exports (IT/BPO). A widening trade deficit puts downward pressure on the rupee, affects foreign exchange reserves, and may necessitate capital account financing.

India's overall merchandise trade deficit: approximately $240–270 billion annually in recent years.
India's current account deficit (CAD): typically 1–3% of GDP; considered manageable up to ~3% of GDP.
India's foreign exchange reserves: approximately $680–700 billion (as of early 2026).
Remittance inflows: India received approximately $120 billion in 2023 (World Bank data) — world's largest recipient.
Services surplus (IT, BPO, financial services): partially offsets the merchandise deficit.
Import cover: typically measured in months of imports; RBI prefers above 9 months.

Connection to this news: The $224 billion BRICS trade deficit means that BRICS nations collectively account for a dominant share of India's overall merchandise import bill — creating structural import dependence that has national security and currency implications.

India-Russia Trade: Energy Geopolitics

Russia-India trade was modest (under $10 billion annually) before 2022. Following Russia's invasion of Ukraine (February 2022) and the subsequent Western sanctions, Russia offered deeply discounted crude oil to India. India — which imports approximately 85% of its crude oil needs — seized the opportunity, making Russia its largest single crude oil supplier by 2023. This relationship deepened further in 2025–26 amid the US-Iran conflict, as Russian oil provided an alternative to Hormuz-dependent Gulf supplies.

India's crude oil import dependence: approximately 85% of consumption is imported.
Russia became India's top crude supplier: by mid-2023, supplying 35–40% of Indian crude imports.
Russian crude discount: approximately $10–15 per barrel below Brent benchmark at peak (2022–23).
India-Russia bilateral trade: exceeded $65 billion in FY2024–25 (up from ~$9 billion in FY2021–22).
Payment mechanism: India-Russia trade increasingly settled in Indian Rupees and Russian Rubles due to SWIFT restrictions.
Russia's imports into India growing at 61% CAGR since 2021 — the fastest among all BRICS partners.

Connection to this news: The $55 billion deficit with Russia is almost entirely an energy deficit — a strategic choice by India to reduce energy costs. The policy challenge is whether this import dependence on a sanctioned economy creates vulnerabilities in the long run.

India-China Trade: Structural Dependence

China has emerged as India's largest trading partner in FY2025–26, with bilateral trade reaching approximately $155 billion, but with a deficit of $112 billion — the largest bilateral trade deficit India has with any single country. India's imports from China are concentrated in electronics, machinery, organic chemicals, and active pharmaceutical ingredients (APIs). Approximately 70% of India's API requirements for pharmaceutical manufacturing come from China, creating supply chain vulnerabilities.

India-China bilateral trade (FY2025–26): approximately $155 billion.
India-China trade deficit (FY2025–26): approximately $112 billion.
Top Indian imports from China: electronics (mobiles, components), machinery, organic chemicals, plastics.
India's API dependence on China: approximately 68–70% of bulk drug imports.
India has imposed anti-dumping duties on over 100 Chinese product categories.
Production Linked Incentive (PLI) scheme: Government initiative to build domestic manufacturing capacity and reduce import dependence — covers 14 sectors including electronics, pharmaceuticals, steel.

Connection to this news: China's contribution of over $100 billion to India's BRICS deficit underscores the limits of economic engagement: India participates in BRICS partly to manage its relationship with China, yet China remains the dominant source of India's import dependence within the very bloc India is chairing.

BRICS Trade Architecture and De-dollarisation Push

Beyond bilateral deficits, BRICS has been developing an alternative trade and financial architecture. The New Development Bank (NDB) provides infrastructure financing. The BRICS Contingent Reserve Arrangement (CRA) offers a $100 billion balance-of-payments safety net. A recurring theme in BRICS discussions is reducing dependence on the US dollar for trade settlement — "de-dollarisation." India-Russia trade already partly uses rupee-ruble settlement. However, full de-dollarisation faces structural barriers: the dollar's role as the global reserve currency means commodity prices (especially oil) are dollar-denominated.

NDB: headquartered in Shanghai; initial authorised capital $100 billion; five founding members each held 20% equal share.
CRA: $100 billion; China contributes 41%, Brazil, Russia, India 18% each, South Africa 5%.
BRICS share of global GDP (PPP): approximately 35–37%.
BRICS share of global trade: approximately 20%.
Proposed BRICS payment system: discussed but not yet operational; faces resistance from members with strong dollar ties.
India's stance: supports trade in local currencies where feasible but has not formally committed to abandoning dollar invoicing.

Connection to this news: India's widening BRICS trade deficit — and its concentration in energy and manufactured goods from China and Russia — gives India strong economic incentive to push for structural reforms within BRICS: better market access, non-tariff barrier reduction, and diversification of export products.

Key Facts & Data

India's total trade with BRICS (CY2025): $416 billion
India's goods trade deficit with BRICS (CY2025): $224 billion
India's imports from BRICS (CY2025): $320 billion (43% of total Indian imports)
India's exports to BRICS (CY2025): $96 billion
Import CAGR (CY2021–CY2025): 12%
Export CAGR (CY2021–CY2025): 3%
China's contribution to BRICS deficit: over $100 billion
Russia's contribution to BRICS deficit: approximately $55 billion
Russia imports CAGR (CY2021–CY2025): 61% (energy-driven)
India-Russia bilateral trade (FY2024–25): approximately $65 billion
India-China bilateral trade (FY2025–26): approximately $155 billion; deficit $112 billion
India crude oil import dependence: approximately 85% of consumption
18th BRICS Summit: September 2026 (India's chairship)
NDB authorised capital: $100 billion; HQ: Shanghai; commenced operations: 2016
CRA pool: $100 billion (China 41%, Brazil/Russia/India 18% each, South Africa 5%)