‘BRICS cannot be an anti-western group’: Dammu Ravi

Interview/ Dammu Ravi, former BRICS Sherpa and former secretary (economic relations), ministry of external affairs

The West Asia crisis has shown the pitfalls of concentrated supply chains. How can India build a safer alternative?

A country with strong manufacturing strengths tends to dominate supply chains, and that’s where China comes in. But such concentration is a dangerous trend.

There is a need to de-risk from supply chains. It is not about totally cutting oneself off, [but about] reducing dependency on concentrated supply chains of any particular region or country.

For BRICS to evolve as a group, it should have diverse supply chains. India is well positioned to take that role with the production-linked incentive scheme, industrial corridors and the prime minister’s Gati Shakti (infrastructure connectivity scheme). Eventually, our manufacturing will pick up, and India will also develop its own supply chains.

Our neighbourhood is one region where our supply chains will integrate strongly, extending further to Africa, which is a very large market and the core of the Global South. BRICS countries offer an excellent opportunity for developing alternative supply chains, and India should take advantage of this, both within BRICS and in the Global South.

Some people see BRICS as an anti-western platform. How does India manage the delicate balance of sitting at both the BRICS table and the western table?

BRICS cannot be an anti-western group. As long as India is in the group, it will ensure that it never steers away from the fundamental focus, which is development. Most BRICS members have well-entrenched economic and political linkages with western countries.

The BRICS position on contentious issues has been nuanced, and it has tried to avoid taking extreme positions that could be construed as anti-western.

If we are able to work on economic collaborations, projects and trade, avoid contentious political issues, and avoid bilateral issues taking centre-stage in BRICS discussions, I see a great future for BRICS to evolve as a solution provider for a large number of countries in the Global South.

You’ve described a common physical BRICS currency as “far-fetched” because of the need to harmonise monetary and fiscal policies. Instead, you advocate trade settlement in national currencies. How will it work? 

Achieving a common currency is not easy. If you are talking about a currency like the euro, you need common fiscal and monetary policies, which also means disciplining fiscal policies to an extent that all countries are able to manage certain levels of inflation, deficit and debt to GDP. I don’t think BRICS countries can achieve that level of harmonisation.

What BRICS countries are aiming for today is whether it is possible to have a benchmarking currency within BRICS. How you arrive at a benchmarking currency is part of the discussion, but that may also take some time.

What is happening significantly within BRICS is member countries being able to do trade settlement in their own local or national currencies. There is no rule binding everybody to do trade settlement in national currencies with all member countries. But enough flexibility is built into this idea, where each member country, to their level of comfort, can do trade settlement with another BRICS country.

Alternative payment mechanisms, alternative currencies and trade settlement in national currencies are a welcome development.

How successful is India in using the BRICS platform to scale initiatives such as Digital Public Infrastructure (DPI) and women-led development across the Global South?

The success of DPI has been well established and demonstrated by India in the past 10 years. UPI is a classic case of how billions of dollars of transactions are crossing platforms, and payment gateways are ensuring transparency and bringing the common man into the fold of an inclusive economy.

Within the BRICS deliberations, there is a strong sentiment in favour of DPI as a game changer for an inclusive economy and a solution provider for the Global South. Similarly, women-led development is a concept that has to be brought into the development paradigm in a big way. India has demonstrated through actions how this can happen, and within BRICS there has been a lot of exchange of ideas on this front.

Given that Russia, China and Brazil are all developing alternative payment methods, how close is BRICS in achieving an interoperable gateway for these digital platforms?

The time has come for us to talk to each other—banks and central banks within BRICS countries—to see how these gateways and platforms in the fintech space can collaborate and provide a seamless cross-border transaction. That is the first step for taking such models to the Global South.

With China’s growing influence in BRICS, in what areas can it foster collaboration and knowledge-sharing, which complements interests of other members?

China comes with huge strength. It has the capacity, scale, skills, infrastructure capabilities, technologies and, most importantly, financial strength. If it looks at opportunities through collaborations, particularly in the trilateral collaboration format, that scope can increase further. The Global South can benefit from such trilateral collaborations.

Combining China’s strengths with India’s engineering skills could be one way to look at it. China, India, Russia or Brazil together trying to do projects within BRICS countries and in the Global South can open up new opportunities and supply chains.

China should be looking at making collaborations, opening up supply chains, and accepting goods from other countries more to foster confidence among BRICS countries and expand the possibilities of trading within BRICS and opening up markets. If it starts to look at trading among BRICS countries, that scope can be further expanded, and confidence levels for businesses will grow.

Do you think India’s concerns regarding Chabahar and CPEC (China-Pakistan Economic Corridor) are being adequately addressed in BRICS?

Chabahar is a project that India and Iran worked on for enhancing connectivity from India to Iran and further on to the Central Asian republics. Unfortunately, that project has been somewhat stalled by US sanctions, and we hope that it will be revived at some stage.

CPEC is altogether a different connectivity project, a Chinese-led BRI (Belt and Road Initiative) project. Our position is clearly articulated in all fora. We do not accept any connectivity project that impinges on the territorial sovereignty of another country, which is why we continue to oppose the China-Pakistan collaboration in CPEC.