BRICS vs G7: Is the World’s Economic Power Really Shifting?

BRICS vs G7: Is the World’s Economic Power Really Shifting?

For decades, when people talked about the world’s most powerful economies, a familiar group dominated the conversation: the G7.

The United States, Japan, Germany, the United Kingdom, France, Italy and Canada have historically played an enormous role in global finance, technology, trade and international institutions.

But the global economic landscape is changing.

And one group has become impossible to ignore:

BRICS.

What started as a simple economic acronym has evolved into an international grouping with a much broader agenda.

But here is the fascinating part:

BRICS may look extremely powerful from the outside. Yet, inside the group, its members have very different interests, political systems and foreign-policy priorities.

So what exactly is BRICS trying to achieve?

Why does India remain inside a grouping that includes China, despite major strategic differences between the two countries?

And perhaps the biggest question of all:

Can BRICS actually reduce the dominance of the US dollar?

Let’s go back to the beginning.

How Did BRICS Begin?

The word BRIC was not originally created by India, China, Russia or Brazil.

It came from Jim O’Neill, an economist at Goldman Sachs.

In 2001, O’Neill published research examining major emerging economies that he believed would become increasingly important to the global economy.

The four countries he highlighted were:

• Brazil
• Russia
• India
• China

Their initials created the term:

BRIC.

At that stage, BRIC was not an international organisation.

There was no BRIC headquarters.

There was no BRIC development bank.

There wasn’t even a formal BRIC institution.

It was simply an economic concept.

But the idea gradually moved from a research paper into international diplomacy.

In 2006, representatives from the BRIC countries began meeting formally.

Then came another major development.

South Africa Joins

South Africa joined the grouping in 2010, turning BRIC into BRICS.

The “S” represented South Africa.

And from that point onward, BRICS began developing a much more institutional character.

Why Did These Countries Want BRICS?

One important reason was representation.

Emerging economies argued that global financial institutions did not sufficiently reflect the changing distribution of economic power.

Institutions such as the International Monetary Fund and World Bank were created in a very different global economic era.

As emerging economies grew, countries such as India, China, Brazil and Russia increasingly wanted greater influence in international decision-making.

That created an important question:

If emerging economies are becoming more important to the global economy, should they also have a greater voice in global institutions?

This became one of the major themes behind BRICS cooperation.

The 2008 Financial Crisis Changed the Conversation

Then came the global financial crisis of 2008.

The crisis severely damaged confidence in the existing global financial system and highlighted the economic importance of emerging markets.

For BRICS countries, the discussion increasingly moved beyond:

“Give us more influence.”

toward:

“Can we create institutions of our own?”

That question eventually produced one of the most important BRICS institutions.

The New Development Bank

In 2014, Brazil, Russia, India, China and South Africa established the New Development Bank (NDB).

The bank began operations in 2015.

Its purpose was to mobilise financing for infrastructure and sustainable-development projects in emerging markets and developing countries.

This was significant because BRICS was no longer simply a forum for political and economic discussions.

It had created an actual financial institution.

And the NDB has grown considerably.

According to the bank’s 2025 annual report, its portfolio contained 115 approved projects worth approximately $35.6 billion at the end of 2025. (NDB)

The bank finances areas including:

• Roads and bridges
• Transport infrastructure
• Clean energy
• Water and sanitation
• Social infrastructure
• Digital infrastructure
• Environmental projects

Its current project portfolio also includes projects in India, China, Brazil, South Africa and other member countries. (NDB)

And India’s relationship with the NDB is particularly significant.

As of the end of 2025, NDB reported 32 approved projects in India, covering areas such as transport, water, sanitation and clean energy. (NDB)

In 2026, NDB reported that India had become its second-largest recipient of financing, with 35 approved infrastructure projects amounting to $10.5 billion. (NDB)

So BRICS is not simply a yearly summit anymore.

It has created institutions capable of moving real money into real projects.

But Here’s Where BRICS Gets Complicated

From the outside, BRICS can look like a single powerful bloc.

But look more closely and the picture becomes much more complicated.

India and China have major strategic disagreements.

Russia has a very different relationship with the West.

China has its own economic and geopolitical priorities.

The UAE has different interests again.

Brazil has its own foreign-policy priorities.

And the political and economic systems of these countries are far from identical.

So why are they sitting at the same table?

Because countries don’t necessarily need to agree on everything to cooperate on selected issues.

A country can cooperate with China through one institution while cooperating with the United States, Japan or Australia through another.

India is a good example.

India is a BRICS member.

At the same time, India is also part of the Quad, alongside the United States, Japan and Australia.

That is not necessarily a contradiction.

It reflects a broader principle in Indian foreign policy:

strategic autonomy.

India can work with different countries on different issues according to its interests.

Why Doesn’t India Simply Leave BRICS?

This is one of the most interesting questions.

India and China have significant disagreements.

But leaving BRICS would also mean giving up a platform where India can directly engage with China and other major emerging economies.

There is another factor:

China’s economic weight.

China is by far the largest economy among the BRICS members.

That gives Beijing considerable economic influence.

But India’s continued participation also means that BRICS cannot simply be reduced to a China-only platform.

For India, staying inside the institution provides a seat at the table.

And that matters.

The Biggest BRICS Debate: The US Dollar

Now we come to perhaps the most talked-about issue surrounding BRICS.

De-dollarisation.

There is frequent discussion about reducing dependence on the US dollar in international trade and increasing the use of local currencies.

But there is a huge difference between:

reducing dollar dependence

and

replacing the dollar completely.

These are not the same thing.

The dollar remains deeply embedded in the global financial system.

The IMF’s latest COFER data shows that the US dollar represented 57.13% of global official foreign-exchange reserves in the first quarter of 2026. (IMF Data)

For comparison, the Chinese renminbi represented only a small fraction of global reserves.

In the fourth quarter of 2025, the renminbi’s share was 1.95%, while the US dollar’s share was 56.77%. (IMF Data)

That illustrates the scale of the challenge.

Replacing the dollar isn’t simply a matter of announcing another currency.

A global reserve currency requires:

• Deep financial markets
• Strong institutions
• International trust
• Large-scale trade usage
• Reliable payment infrastructure
• Liquid government bond markets
• Stable monetary policy
• Confidence that the currency can be moved freely across borders

That’s why creating a genuine BRICS-wide currency would be extremely complicated.

Could BRICS Create a Common Currency?

This is where many discussions become confusing.

A common currency would be very different from simply using local currencies for bilateral trade.

Imagine India and Russia conducting some transactions in rupees and rubles.

That is one thing.

Creating a completely new currency used across multiple economies would be something else entirely.

Then comes the biggest question:

Who controls it?

Who determines its value?

Who sets interest rates?

Who provides emergency liquidity?

Who manages monetary policy?

And what happens when one member country faces a financial crisis while another country is experiencing rapid growth?

These questions become extremely difficult when the participating economies have very different economic structures.

And What About the Chinese Yuan?

Another important question is whether reducing dollar dependence could unintentionally increase dependence on China.

China is the largest economy in the BRICS group.

It is also a major trading partner for many emerging economies.

Therefore, if BRICS financial arrangements increasingly relied on Chinese financial markets or the renminbi, some analysts could reasonably raise another question:

Would the system simply move from one dominant currency toward another?

That is one of the strategic issues India would have to consider.

India’s interest is not necessarily to replace one external dependency with another.

Instead, greater use of multiple currencies and diversified payment systems could potentially give countries more options.

But the scale of that transition remains uncertain.

BRICS Has an Advantage the Dollar System Doesn’t Fully Replicate

Despite the difficulties, BRICS has an important feature:

It brings together countries that collectively represent enormous economic and demographic weight.

And the grouping has continued expanding its membership and partnerships.

But expansion creates another problem.

The more countries join, the more difficult it can become to find common ground.

Think about five people running a business together.

If everyone has broadly similar priorities, reaching a decision may be relatively easy.

But imagine adding another ten people with completely different businesses, financial situations and long-term goals.

The group becomes bigger.

But decision-making can become more complicated.

That is one of the central challenges facing BRICS.

More Members Doesn’t Automatically Mean More Unity

A larger BRICS can mean:

More markets.

More trade opportunities.

More resources.

More geopolitical weight.

But it can also mean:

More competing interests.

Different countries may join BRICS for different reasons.

One country may want greater access to investment.

Another may want more trade opportunities.

Another may want alternatives to Western financial systems.

Another may simply want stronger diplomatic relationships with emerging economies.

These objectives can overlap without being identical.

That makes BRICS simultaneously powerful and complicated.

BRICS vs G7: A Completely Different Model

The G7 and BRICS are often compared, but they are fundamentally different groupings.

The G7 is a small group of advanced industrial economies with long-standing political, economic and security relationships.

BRICS is a much more diverse grouping of emerging and developing economies.

Its members have different political systems, economic models and foreign-policy priorities.

Therefore, expecting BRICS to operate exactly like the G7 may be misleading.

The key question is not simply:

“Which group is more powerful?”

The more useful question is:

“What kind of power does each group actually have?”

The G7 has deep financial, technological and institutional influence.

BRICS has enormous population, resource, production and emerging-market weight.

The two forms of influence are not identical.

The Dollar Is Still Extremely Difficult to Replace

There is another important reality.

Even countries seeking greater use of local currencies often continue to hold substantial dollar reserves.

That is because the dollar remains deeply integrated into global trade and finance.

The IMF’s 2026 data confirms that the dollar still accounts for more than half of allocated global foreign-exchange reserves. (IMF Data)

So a realistic scenario may not be:

Dollar disappears → BRICS currency takes over.

It may instead look more like:

Dollar remains important + more local-currency trade + more diversified payment systems.

That distinction is crucial.

So What Does India Actually Gain From BRICS?

For India, BRICS provides several potential avenues of cooperation.

1. A platform with major emerging economies

India can engage directly with China, Russia, Brazil, South Africa and other participating economies.

2. Development financing

The NDB provides another source of financing for infrastructure and sustainable-development projects. (NDB)

3. Trade opportunities

Greater use of local currencies could potentially make some bilateral transactions less dependent on the dollar.

4. Diplomatic leverage

India can participate in discussions about reforming international financial institutions and increasing the voice of emerging economies.

5. Strategic autonomy

India can simultaneously participate in BRICS, the Quad and other international partnerships.

This allows New Delhi to avoid placing all of its strategic relationships in one basket.

But There Are Real Challenges

BRICS also faces serious questions.

How far can countries with conflicting interests cooperate?

Can China and India maintain meaningful economic cooperation despite their strategic differences?

Can BRICS increase local-currency trade without creating financial instability?

Can the group develop payment mechanisms that are trusted internationally?

Can it expand without making decision-making more difficult?

And perhaps most importantly:

Can BRICS turn economic size into long-term institutional influence?

These questions remain open.

Is BRICS Going to Replace the G7?

There is no simple answer.

BRICS does not need to completely replace the G7 to become more important.

The global system could instead become more multipolar.

The G7 can remain highly influential in technology, finance and advanced industrial economies.

BRICS can simultaneously become more influential among emerging markets, energy producers, commodity exporters and developing economies.

In that scenario, the world would not necessarily have one dominant economic group.

It could have multiple centres of power.

And that may be the bigger story.

The Real Future of BRICS

BRICS began as four letters in an investment-bank research report.

Today, it has become a major international platform with expanding membership, financial institutions and ambitions for greater cooperation among emerging economies.

Its New Development Bank has already moved tens of billions of dollars into approved projects, while continuing to expand its activities. (NDB)

At the same time, the US dollar remains deeply entrenched in global reserves and international finance. (IMF Data)

So the future may not be about one side completely defeating the other.

It may be about competition, diversification and a gradual redistribution of economic influence.

BRICS has enormous potential.

But its biggest strength — the diversity and economic scale of its members — is also one of its biggest challenges.

The countries may not agree on everything.

They may not share the same political systems.

They may not have identical foreign-policy objectives.

But they have discovered something important:

They can still sit at the same table when their interests overlap.

And that alone could make BRICS one of the most important economic experiments of the 21st century.

Final Question

So, will BRICS eventually create a genuine alternative to the existing global financial system?

Or will its internal differences prevent it from becoming a truly unified economic bloc?

There is no settled answer yet.

The next decade could reveal whether BRICS becomes primarily a platform for cooperation among emerging economies — or develops into something much more significant in the global financial system.

What do you think?

Can BRICS genuinely reduce the world’s dependence on the US dollar, or will the differences between its members make that goal extremely difficult?

Share your thoughts in the comments.