BRICS+ group set to overtake G7 in global trade by 2026, EY India eports

BRICS+ coalition, comprising nations like India, China, and Russia, is on track to surpass G7 in global merchandise tre by 2026, according to a recent report by EY India in its latest edition of EY Economy Watch.

Since 2000, BRICS+ share of global merchandise exports has surged from 10.7 per cent to 23.3 per cent in 2023, a substantial increase of 12.6 percentage points. Conversely, G7's share has plummeted from 45.1 per cent to 28.9 per cent, reflecting a decline of 16.2 percentage points over same period. report indicates that rest of world’s share has remained relatively stable, rising slightly from 44.2 per cent to 47.9 per cent.

A similar trend is evident in merchandise imports. BRICS+ share grew from 7.2per cent in 2000 to 18.9 per cent in 2023, while G7's share dropped from 49.8 per cent to 33.7 per cent. Once again, rest of world's share increased marginally, from 43.0 per cent to 47.4 per cent.

D K Srivastava, Chief Policy visor at EY India, noted, "Given current trends and potential for new members to join BRICS+ group, it is likely ir share in global merchandise exports will overtake that of G7 by 2026." This shift may challenge G7's longstanding dominance in global economic governance.

As geopolitical tensions rise, BRICS+ nations are making efforts to coordinate ir policies, which could le to a reduction in reliance on US dollar for global tre and foreign exchange reserves. EY report highlights that Yuan has remained stable, while Indian Rupee has faced depreciation since 2018.

Moreover, BRICS+ group's share of global high-tech exports has significantly increased from 5.0 per cent in 2000 to 32.8 per cent in 2022, indicating a strategic pivot toward technology-intensive products.

report suggests a potential shift toward a multipolar currency framework, with US dollar's share as a global reserve currency declining from 71.5 per cent in 2000 to 58.2 per cent in 2024.

As BRICS+ countries explore alternatives to SWIFT platform for international transactions and develop a tre and reserve currency backed by gold and or commodities, global economic landscape may be on brink of a transformative change.