Your humble blogger has found M. K. Bhadrakumar to be a bit of a mixed bag as a geopolitical commentator. On the one hand, he’s written many extremely insightful columns at his website, Indian Punchline. But from time to time, he’s had some pieces that were eyebrow-raising, such as ones where he speculated on Russian politics. However, below he is discussing India’s view of BRICS, and here he should be on very solid ground. And as you will soon see, in a fresh interview with Glenn Diesen, Bhadrakumar gives a harsh reading of the BRICS project.
The fundamentals of India’s position are very much like the foreign policy principles that Jerri-Lynn Scofield described, citing the statements of India’s impressive Minister for External Affairs, Subrahmanyam Jaishankar. Jerri cited key passages from S. Jaishankar’s 2020 book, The India Way: Primer for India’s Multipolar Approach to Foreign Policy in a 2022 post:
Jaishankar outlined a foreign policy for India to pursue in a multipolar world:
…it is the underlying assumptions that can make a difference. We have been conditioned to think of the post-1945 world as the norm and departures from it as deviations. In fact, our own pluralistic and complex history underlines that the natural state of the world is multipolarity. It also brings out the constraints in the application of power. A behaviour and a thought process which reflects that can facilitate the creation of a more favourable equilibrium with others (Jaishankar, p. 20).
As I noted in March when I last addressed these issues in IIndia Is Mulling Rupee-Ruble Payments System for Trade with Russia, this multipolar orientation draws from the non-alignment tradition that India’s first prime minister, Jawaharlal Nehru, pioneered in the immediate post-colonial period. But as Chowdhury told me, “The new policy is one of multi-alignment, where India engages with all major countries – but kowtows to no one.” Note that this is a world no longer dominated by the G8; instead, half the world’s twenty largest economies are now non-Western (Jaishankar, p. 41).
According to Jaishankar:
Geopolitics and balance of power are the underpinning of international relations. India has a tradition of Kautilyan politics that puts a premium on them. If there are lessons from the near part, it is that these were not given the weightage that they deserved. The Bandung era of Afro-Asia n solidarity in the 1950s serves as a reminder of the costs of neglecting hard power. But more than lack of focus on capabilities, they reflect an underlying thinking. We have since reached a league where the ability to protect our interests is an assumption, not just an option. This is best done through a mix of national strengths and external relationships (Jaishankar, p. 16).
In 2024, we posted Indian Foreign Minister Throws Cold Water on the Idea of a BRICS Currency. Keep in mind, as we have repeatedly stressed, that the BRICS initiative of setting up payment systems to facilitate bi-lateral trade, frees countries in participating trade pairs from dollar sanctions and is thus very beneficial. But it does not amount to the goal that many BRICS enthusiasts attributed to the alliance, that of creating a new currency. From that post:
The remarks by the highly respected Indian foreign minister Subrahmanyam Jaishankar should put paid to the idea that a BRICS currency is coming soon, if ever. Jaishankar raises a series of particular issues consistent with a point we have made: that a common currency would require a very substantial legal and systems architecture. Agreeing on the legal structure would entail a reduction of sovereignity (BRICS rulings would have to supercede national courts) which seems contrary to the notion that BRICS is meant to increase, rather than reduce, national sovereignity. Jaishankar also points out, as we have, that the BRICS nations are too economically diverse (as in often divergent) to make a common scheme work easily if at all.
Jaishankar points out that bi-lateral currency deals work well enough and appear satisfactory to most BRICS members. That does leave unsolved the point that your humble blogger and Michael Hudson have raise: that absent mechanisms to encourage balanced trade such as the ones that were part of Keynes’ Bancor, many countries are likely to wind up with sustained trade deficits relative to particular trade partners. What happens when those countries wind up with a lot more of that currency than they want? They can use it to buy assets in the chronic trade deficit country, but a lot of nations do or would place restrictions.
With that as prologue, Bhadrakumar’s remarks should come as less of a surprise. Starting at 22:15:
Professor Glenn Diesen: And we saw this after World War II, but continuously the US draws a lot of power from making sure that other countries only use US technologies, only use its industrial products, only use energy, its supplies, only use its transportation corridors, banks, currency, the SWIFT payment system. Again, everyone is dependent on US and the US avoids any real dependence on anyone else, then you can have this asymmetrical interdependence where the US draws its hegemonic power from. But I think the Europeans, they committed themselves to this model thinking that they would be rewarded. Instead as you said. it’s more of a vassal status now.
But how do you think the United States, I think Trump is very open about its his intentions to break up BRICS. But is this also a pressure on India to reduce its ties to BRICS? In other words, if BRICS is an instrument for diversification to have a more multipolar economic system, how far is India willing to go to defend its position in BRICS? Because often one gets the impression that India’s commitment is not among the strongest.
Former Ambassador M. K. Bhadrakumar: Look, Professor, this is a brainwave of the Russians, BRICS’ idea and then the Chinese. And our prime minister happened to be visiting Russia at that time and on the sidelines of a multilateral event he was sounded out whether he would sit in for a meeting like this. He agreed, if anything out of sheer politeness. And then it was languishing. You look at the history of this moment, languishing, and then the Russians breathed new life into it in 2014 and in 2020 uh 2022 when they needed it. They brushed it up and brought it up as a platform to defy the US and to orchestrate processes which have a strong anti-American content. Plainly I’m saying that this is what has happened on BRICS.
Otherwise BRICS is a toothless organization and it has absolutely no cutting edge in it. This is completely a doing of the Russians and the Chinese. India had nothing to do with it. That is the plain reality.
Now therefore if Trump is raising dust over it, the person to answer that should be Vladimir Putin or Xi Jinping. This is “Do not pit India against Trump when it comes to BRICS.” That is maybe a very smart game and they go and lie under the carpet, not being seen at all. But they are the ones, the culprits here, to give a cutting edge to this.
And at earlier time, even Shanghai Cooperation Organization you were had a cutting edge like this and it used to be called Asian NATO. India never, really, never really, was part of giving an anti-American slant to the BRICS. So Trump knows that and Trump is comfortable with that.
If Trump, if BRICS has not gone in the direction of developing a new BRICS currency, Trump should give credit to India because it was India’s opposition, India’s reservation.
Look at it like this: India has no problem with SWIFT. India has no problem in trading with dollars. India is not fearing that, India is not fearing that its resources are going to be confiscated by the Americans. Whose problem is this?
India is interested in one aspect of it which is to transfer the payment system to local currencies because that is an entirely different matter. It is in giving a habitation and a name for India’s currency in the world currency basket commensurate with India’s growing stature as an economic power.
You see it also has no anti-American thrust to it. If there are countries which do not have dollars to spare, India can still trade with them if they trade in local currencies. There is no anti-American content there. And the both these countries India and that country which does it they both have access to SWIFT. Nonetheless we use it like this. So therefore you know, it’s an ingenious thing that is happening here when you speak about on the one hand time-tested friendship and so on between India and Russia and then the Russians going and hiding when there is pressure from the Americans on BRICS and saying that it is, it is India’s can of worms. It is not. It was conceived in the womb of the Russian decision makers. So the Russians must answer this.
Diesen seemed taken aback and changed the topic to Iran, which he tried to depict as another front of American pressure on Iran. Bhadrakumar rejected that: “Iran is a completely different story.”
And before you see this line of thinking as toadying to the US, recall that India came under tremendous pressure from the US in 2022 for continuing to trade with Russia. Jaishankar has been giving variants of this speech for over two years:
India will continue buying Russian oil because it benefits the country, Foreign Minister Subrahmanyam Jaishankar said after meeting his Russian counterpart https://t.co/fDbnUePZ54 pic.twitter.com/BbRvJZm3Bq
— Reuters (@Reuters) November 8, 2022
I can’t find it, but I also recall a Western journalist pressing Jaishankar with the Bush logic of “You are either with us or against us” and Jaishankar politely refused to accept it. India has the right to truck with nations all over the world and will not have those relations constrained by loyalty tests.
Even though the US has become thuggish in its efforts to shore up its flagging empire, that does not mean that countries involved in BRICS want it to serve as a countervailing force, as opposed to a venue for advancing certain initiatives. For those who have follow readouts of Xi’s conversations with US presidents, one point he regularly makes is that China does not engage in bloc confrontation. Bhadrakumar’s remarks on BRICS suggest that many Indian diplomats and political leaders would disagree with that claim.
“What happens when those countries wind up with a lot more of that currency than they want? They can use it to buy assets in the chronic trade deficit country, but a lot of nations do or would place restrictions.”
Can’t they just sell those currencies on the open market? They would have to give up guaranteeing a fixed exchange rate to their own citizens, or even guaranteeing exchange at all.
” the Bush logic of “You are either with us or against us” and Jaishankar politely refused to accept it. India has the right to truck with nations all over the world and will not have those relations constrained by loyalty tests.”
Is Jaishankar refusing to accept that Bush is saying “You are either with us or against us” or is he refusing to make the choice that Bush insists on? The US Government might make the choice of reducing its trade with India via tariffs.
India might not be toadying to anyone but when you refuse to pick a side then one or maybe both, sides might declare you their enemy and proceed to attack you. India is hoping that the size of their economy will insulate them from the struggle. Russia and China will be waiting for the US to disabuse India.
No, not in the currency amounts they would accumulate. They would swamp market liquidity. These levels would be massive relative to typical foreign exchange trading volumes.
And say if Russia accumulates a lot of Turkish lira (generally regarded as a terrible currency from an investment perspective), even if they could sell that much, they would drive the price of the lira down even more, and drive the value of the rouble up, which would make Russia less competitive by virtue of having an expensive currency. Who wants a currency like Turkish lira except someone who has to take it in trade?
Turnover in global foreign exchange (FX) markets reached $7.5 trillion per day in April 2022 (Graph 1, panel A), a volume that is 30 times greater than daily global GDP.
https://www.bis.org/publ/qtrpdf/r_qt2212f.htm
Perhaps the story is entirely different for BRICS currencies. But from Graph A1 at the same link, it is evident that USD volume is double “Other” volume. Even with “Other” being heavily weighted towards CHF, CAD, AUD, that’s a lot of volume in non-Western currencies.
That is all in the major currency crosses, all against the dollar, and even more critically. major dealer banks willing to hold balances. That’s because over 95% of foreign exchange trading is the result of cross border investment transactions, not trade, per the BIS.
Dream if you have that with Turkish lira v. the dollar. It’s deemed to be a high risk currency. No dealer will take that trade in any size due to the fact that they would be stuck with it.
To add, we have a real world example of precisely this issue, mentioned in Alexander Mercouris’ Monday presentation, starting at 1:19:40 (https://www.youtube.com/watch?v=9fjPQz1U4cU), he describes how the oil trade between Russia and India “has not been without problems” because India pays Russia in rupees, which is a tightly controlled currency and Russia has been struggling to make use of them (as in there are not enough Indian exports that Russia wants to buy).
Thanks for underscoring Bhadrakumar’s easily-overlooked overlooked point: Trump’s implicit adoption of Bush’s “you’re either for us or against us” starkly violates the Westphalian system of sovereign nation-states.
Unfortunately, most of Western leadership now seems to either disavow (EU Commission) or be ignorant of (US gov’t) this essential principle. But not everybody; per Wikipedia,
Having read and listened to Putin’s answers to questions about BRICS I find no difference between what he says and that of Bhadrakumar’s remarks. There is no movement within BRICS to replace USD , but rather the advancement of bi-lateral trading mechanisms using local currencies. China does not want to carry the load of a global currency.
The Bhadrakumar’s remarks seem aimed at keeping Trump at bay, nothing more. He obviously represents to US leaning advocates in India who are under pressure from the RICs lobby internally.
South Africa and others (IIRC Brazil) were most certainly calling for a new currency, as were some “journalists” acting as touts by promoting one project called The Unit and trying to present it as having official Russian backing.
Yes indeed the talk was by ‘hangers on’ , maybe not altruistic. The ‘BS’ might have dreamed but the RICs put paid to those dreams, maybe for varying reasons.
BRICS+ seems to be a useful ‘talk shop’ to divert attention from SCO where the real moves are made.
Umm, India believes in a multipolar world, in rhetoric. Bhadrakumar’s view is India is not inclined to be a participant in stirring up the imperial machine, so that machine should instead direct its ire on China and Russia. It baffles me so many in the west buy into the notion that India is some sort of rising power. No, India has great power ambitions and wants to it get without doing the work, by hitching its boat to the American one.
Notice the timing of these remarks. It follows Trump’s maximalist demands on trade, to which India responded with inept meekness; ‘we are studying’ the proposal. It’s worth keeping in mind just how vulnerable India’s ruling elite is to America’s threats — on top of an already compliant and submissive poise towards the west in general. Adani, the single biggest factor in Modi’s power projections abroad, and a conduit of foreign capital enabling financial frauds, whose criminal prosecution is being dangled as “Damocles sword” (quoting a close aide) by US prosecutors over Modi’s head is the sort of liability the Modi government has very little room to wiggle out of. India’s ruling elite is a cabal run in the interest of its oligarchy, closely tied with western capital. That’s the key to India’s position, not the fluff Jaishankar issues to pander Indian PMC egos.
A BRICS currency is unnecessary, and it has, as noted, a tangle of issues to get it to life. Instead, China has set up HongKong banking to handle Tether. Stablecoin tied to gold is (apparently) envisioned. In four years it has grown to supersize. Kevin Walmsley’s reports on Tether (links below) point out how so. It’s a financial development that ranks among the most important (his contention), yet is largely unnoticed.
https://youtu.be/5eiI8KGXaf8
https://youtu.be/NJEQUSWWo6U
Tether is not an escape from the USD. It is tied to the USD and its asset base is heavy in US Treasuries, which makes many at the Treasury Department very happy. Right now much of its transactions are outside the purview of US authorities, but don’t expect that to last long.
BRICS is proceeding step by step toward the creation of a separate structure to manage trade that is not entirely beholden to SWIFT, to the dollar, to the United States. The US, Trump, is rather like a drunken elephant best avoided as far as possible and left along in hopes that it will sober up. Put another way, BRICS is doing its best to stay out of the path of the falling dominoes. India has to keep a close eye on the elephant and an ear on the clatter of dominoes. It is a posture that the US is pushing and pushing to change. The BRICS seems to be waiting.
India is part of BRICS but I always had the impression that they are only there to benefit themselves and not build something greater. Anyway, Bhadrakumar may say that India has no problem with SWIFT or dollars but does he seriously imagine that they will never be turned against India? That somebody like Trump would cut India off from the SWIFT network for the high crime of developing too rapidly? For Washington, SWIFT alone has been weaponized by them and it is now the ‘Tonya Tapper’ of international finance. US policy is to never tolerate a peer competitor and although it is to late to stop China, they did a number on the EU and no doubt India will be in their gun-sights sooner or later. And yet Bhadrakumar seems to blame everything on Russia when he can see that they have been under attack for so many year and are looking to defend their economic interests. Look at Brazil. Trump slammed them with 50% tariffs but Brazil has plenty of other partners and is in BRICS which allows them to defend themselves. The US already backs Pakistan against India so if I was India, I would start doing some planning now for when the US goes after them. It could happen so easily.
The Indian diaspora is already influential in US politics. The Chinese diaspora, ex in California, is not.
I find it remarkable the number of times you come across those that have Indian heritage showing up in the halls of power in the US. Four names that come immediately to mind are Usha Vance, J.D. Vance’s wife, Nikki Haley, Vivek Ramaswamy and Kamala Harris but I have come across others.
having English as a native language for first-generation immigrants (who “came off the boat” more likely as MDs, PhDs, scions of their native elite, etc,) while still having their other foot in their diaspora, made climbing the power-networking ladder/political machine a lot easier for them and their kids. imo.
The Indian diaspora in US politics doesn’t really operate to benefit India unlike the Israeli lobby. Sure they will hobnob with the Indian diplomats and business elite but that hasn’t really translated to policy benefits for India. PM Modi and the BJP were banking on the hopes that the Indians in the Trump administration along with Modi’s supposed strong friendship with Trump would translate to a better deal and more preferential treatment.
I agree the Chinese diaspora is not very influential in US politics outside of their local enclaves, and the highest office they tend to achieve seems to be city council etc. Not sure if it is a cultural issue. I doubt it is an English language issue, as there are plenty of 1st and 2nd generation Chinese who are fluent in English.
This is not quite correct. Many in the Indian diaspora are wealthy or well-off due to leveraging Indian connections, particularly the IT outsourcers. Generics is another area where Indian concerns have strong footholds in the US. So they have strong commercial interests.
I should have been more specific. Yes, you are correct that in certain areas such as IT and outsourcing and generic meds they have been influential. But in terms of overall benefit to India or in terms of geopolitics, not as much as say the Israeli lobby. But then again that is a very unique entity in terms of the international lobby in Washington so perhaps it is not a fair comparison on my part.
I’m thinking the whole point of BRICS is to benefit oneself, as a sovereign nation not beholden to Western Institutions and US whims. B,R,I and C have now each officially replied to the USA that they can’t be told what to do, but they are all willing to negotiate.
It’s not that BRICS is anti-American, or a block, it just allows it’s members to act independent of the State Department, IMF or World Bank (to some extent).
BRICS is not a threat to USA because someday it may have a bancor of some sort, but because it offers an alternative, and having an alternative gives a country leverage. For now, USA does not handle well other side’s leverage.
I am sorry but this argument is fallacious.
Medium sized countries cannot operate autonomously. They have to join power blocs for self-protection and/or to have leverage.
And for bancor to work, member states would need to give up considerable sovereignity to submit to a supranational body that would enforce bancor rules, such as very large fines and forced de or re-valuations.
Then the medium sized countries are out of luck, since there are no power blocks at the moment.
And I mentioned bancor only as meh not as a functional thing, for BRICS just by existing offers an alternative to US domination, which gives leverage. Just check what Lula’s saying.
Lula does not have influence due to BRICS. His leverage with the US is in not running a surplus. Brazil can take a tariff hit better than other countries due to not needing US exports much and having most of those be things like coffee which can without too much difficulty be sent to other markets (yes, the exporters will take some hits as they reorganize their lives, but they are in a less bad position than India, which has the US as its biggest trade partner).
You misuse the term fallacious. A fallacy can be one of numerous invalid logical argument forms. His argument isn’t fallacious. It seems you merely dispute some of its propositions, and /or its conclusions.
I only know about Bhadrakumar from his blog which sometimes treats Trump as some kind of master strategist rather than a boob. His latest betrays a hint of disillusionment on that front.
https://www.indianpunchline.com/a-frenemy-named-donald-trump/
So perhaps the point that Bhadrakumar should be emphasizing is less that Russia and China are “anti American” (are they?) than anti stupid. Before Trump there was Biden–also out of it–and the feckless Obama and “we’re an empire now” Dubya. How serious is this rogue’s gallery?
That sounds about right.
They are anti stupid.
Looking back at his writings over the past 4-5 years he tends to vacillate over the nature of BRICS and whether it is anti-west or not as well as India’s role (necessary member vs saboteur). This is the first I can recall where he has called BRICS toothless. Not sure if it because India is now on receiving end of Trump’s wrath or because of lack of more forceful action from BRICS on the ongoing genocide in Gaza.
For what it is worth, Chas Freeman has said something very similar, that BRICS so far has been mainly about voicing grievances than advancing much of a positive agenda. Professor Mohammed Marandi also dismissed BRICS in a recent aside, saying what mattered was not BRICS (which confirmed now much lowered expectations of it) but the idea of BRICS, as in multipolarity.
Methinks Indians are into other kinds of yellow bricks that don’t involve other countries. I’ve never seen AuBugs the likes of them.
India has no problem with SWIFT. India has no problem in trading with dollars. India is not fearing that, India is not fearing that its resources are going to be confiscated by the Americans. Whose problem is this?
India is interested in one aspect of it which is to transfer the payment system to local currencies because that is an entirely different matter
These two paragraphs are opposed in that SWIFT requires trading through the US system precisely to benefit the US and trade in USD. Local payments systems, as per BRICS, run counter to the US centralization (and are much faster as there are no banks involved doing paperwork to cream off their %age. The reason the US and Europe don’t like BRICS is because it takes money off them and the west is primarily service driven so its primary income is financial transactions and an obsession with stock and real estate markets
Now the US is threatening all countries that trade with Russia, that 60% of the globe must make a decision either to let themselves be vassals to the west in perpetuity, or take the risk of a more open market with the BRICS group.
There are problems with international trade and the unevenness of business, with indebted countries facing long term poverty but these are no more severe than they face at present and the structure of BRICS is such that nations can negotiate and write off debt rather than simply accruing dominance
I’ve had to stop reading Bhadrakumars blog because I found his writing style very irritating. I know that sounds very childish, but honestly, his overuse of metaphor, similie and analogy was just too much, he constantly tries to pack clever sounding word play into each sentence. My wife describes it perfectly, “…. sounds like you swallowed a dictionary”.
Another thing that stood out in the interview with G.D. were the statements on defense spending and development.
Plenty action and certainty with budgets and planning in BRICS countries around spending on weapons – more so than for something like development in the Global South. Of course, with so many bullets and bombs currently flying and all of the saber-rattling, it’s not surprising.