India hosts BRICS summit as Middle East conflict tests expanded bloc

India is hosting the 18th BRICS Leaders’ Summit in New Delhi this weekend, thrusting the expanded alliance of emerging economies into a delicate balancing act over global conflict and economic survival.

Russian President Vladimir Putin arrived in New Delhi on Friday morning ahead of the two-day summit starting on Saturday. He joins Prime Minister Narendra Modi, Chinese President Xi Jinping, and ten other world leaders at a time when the bloc is trying to assert itself as a champion of the Global South.

But the gathering at the Bharat Mandapam venue comes under a heavy geopolitical shadow.

Deepening geopolitical divides

This is the first major BRICS gathering since the US-led war on Iran began six months ago. Both Iran and the United Arab Emirates joined the bloc in 2024, yet they find themselves on opposite sides of the conflict.

These divisions have already stalled progress. A preparatory meeting of BRICS foreign ministers in May ended without a joint statement because the UAE refused to back Iran’s demands to formally condemn American and Israeli actions.

Speaking ahead of the summit at the BRICS Business Forum, External Affairs Minister S. Jaishankar warned that developing nations must learn to adapt to a rapidly changing global order. He urged businesses to build economic resilience, noting that supply chains and trade are increasingly vulnerable to political shocks.

The climate and finance agenda

Beyond immediate security crises, India is using its presidency to focus on climate action, energy security, and critical minerals.

New Delhi wants to shift the conversation away from simple emissions targets toward the practical challenges of funding. Prime Prime Minister Modi has previously warned that without actual technology transfers and cheap loans, global environmental goals remain nothing but "talk."

The bloc is backing a push to mobilise $1.3 trillion by 2035 in climate finance for developing nations, a goal linked to the upcoming COP30 negotiations. At an environmental working group meeting in August, India’s Environment Minister Bhupender Yadav also pressed for joint action on forest fires and climate adaptation to protect vulnerable communities.

Can BRICS challenge the dollar?

While BRICS now represents 11 nations—accounting for nearly half the world’s population and 44 per cent of global oil production—its ability to act as a true counterweight to Western-led financial institutions remains limited.

The group’s alternative financial institution, the New Development Bank, had approved only $39 billion in total funding by the end of 2024. That is equivalent to just a few months of commitments from the World Bank.

Furthermore, the bank still raises most of its money in US dollars. Despite rhetoric about de-dollarisation, member states remain deeply reliant on the American currency for international trade and reserves, making any rapid shift away from the dollar unlikely in the near future.