As India concludes its BRICS summit and prepares to hand the baton to China, the grouping finds itself at an important inflexion point. Its first decade was largely about giving the Global South a stronger voice. The next should be about turning that voice into capital, investment and development.
The New Delhi Declaration points in that direction. Beneath the geopolitical language is a more interesting story: BRICS is gradually assembling pieces of a financial architecture around local-currency finance, payment interoperability, guarantees, a stronger New Development Bank (NDB), climate finance, and private investment.
The test now is whether these pieces can actually change how capital flows into emerging markets.
That matters most in climate finance. The problem for developing economies is not that the world has no money. Global savings are not scarce and are looking for long-term investment. What is missing is a way to bring that money into emerging markets at a cost and scale that makes projects viable. Currency risk, weak project pipelines, regulatory uncertainty and high financing costs still keep much of that capital away.
The Declaration begins to address some of these barriers. It links climate finance to debt and fiscal constraints and puts greater emphasis on making projects bankable and attracting private capital. Its support for the BRICS Multilateral Guarantees initiative is particularly significant. A guarantee can do something another lending programme cannot: take some risk off the table and make a project more attractive to investors.
Another opportunity deserves greater attention. Better alignment between the green and transition-finance frameworks being developed across BRICS could make the region more attractive to international investors. Global capital needs to know what qualifies as a credible green or transition investment, how it is measured and how opportunities in one market compare with those in another. BRICS does not need one common taxonomy. But greater interoperability, shared principles and more comparable disclosure could reduce the uncertainty and transaction costs that often deter foreign investment.
In other words, greening the financial system could itself become part of the strategy for attracting capital.
The NDB will be central to this effort. The Delhi Declaration calls for a stronger role for the Bank in development and sustainable infrastructure, including greater use of local-currency financing. NDB’s emerging strategy also places greater weight on climate finance and non-sovereign lending.
But the success of its local-currency agenda should not be measured simply by how much it borrows in local currency.
That distinction matters. In a market such as India, domestic banks, insurers, pension funds and other investors already compete for local bonds. If an MDB simply issues more rupee debt and lends the proceeds back into the same market, it may not add much. It could even crowd out other issuers.
The better measure is additionality. Can NDB provide maturities that local markets do not? Can it help bring institutional or foreign investors into projects they would otherwise avoid? Can a guarantee, a blended-finance structure, or better project preparation turn something that is almost investable into something investors can actually back? Can NDB help build parts of the domestic market rather than compete with them?
That is where its real value will lie.
India’s presidency has helped bring these issues together. The Growth and Development Task Force, work on climate finance and adaptation, the focus on central banks and green finance, and the BRICS-NDB Knowledge Portal all point towards a more practical approach. One that connects climate action with growth, technology, finance and national circumstances.
That is important because the transition in BRICS countries will be much bigger than adding renewable energy. It will mean building grids, batteries, and critical-mineral supply chains; scaling electric mobility; cleaning up industry; and making infrastructure more resilient. The challenge is increasingly about making these investments commercially viable, not simply subsidising them.
Adaptation may be the hardest case. Investments in water systems, heat resilience, resilient agriculture and climate-proof infrastructure can be difficult to monetise even when their social returns are high. Here, development institutions can play their most useful role by absorbing risk, improving projects and making them investable and not simply by adding another layer of debt.
The New Delhi Declaration should therefore be seen as a beginning, not an end. It does not create a common BRICS currency or a large common climate fund. Many of its initiatives are still works in progress. But it does bring together several pieces that could, if connected properly, make a difference.
That is what China inherits in 2027. India has put many of the building blocks on the table. The next presidency will have to show whether they can work together. And whether BRICS can generate genuinely additional finance, rather than simply moving money from one pocket to another.
BRICS does not need to replace the existing financial system to prove its value. It needs to make investment in emerging markets easier to understand, easier to de-risk and more attractive to both domestic and global capital.
Its first decade gave the Global South a stronger voice. The second must show that the voice can move capital.
By Vaibhav Pratap Singh, Executive Director at Climate and Sustainability Initiative. (Views are personal)
Originally published in Liveint.
