BRICS as ‘Plausible Multilateralism’: India Leads Two New BRICS Tax Working Groups After Delhi Summit

The news

New Delhi. Two pieces today take India’s BRICS year beyond this magazine’s September 17 card on post-summit diplomacy. In The Hindu, Varghese K. George and Stanly Johny argue that the 18th BRICS summit, held in New Delhi on September 12-13, 2026, succeeded because New Delhi forged a consensus among 11 member-countries, including the UAE and Iran, which are “involved in an undeclared conflict”, and produced the Delhi Declaration. It was the first BRICS summit since the U.S. and Israel launched their war on Iran on February 28, 2026, and brought the Presidents of Iran, Russia and China to Delhi. They note that Prime Minister Narendra Modi was in Israel two days before the bombing began and that India at first did not condemn the strikes or the killing of Ayatollah Ali Khamenei, but then “strongly endorsed” the Shanghai Cooperation Organisation’s Bishkek resolution condemning the strikes and hosted President Masoud Pezeshkian. BRICS, they argue, keeps India and China engaged without high-level visits, and its members agree that unilateralism by any bloc is harmful. Citing the Russia sanctions Bill passed by the U.S. House on September 16, they say Washington is pushing Delhi into a “more subordinate relationship”, and conclude that India must never become “a frontline in the U.S.-China competition”. The Economic Times reports the practical side. At the BRICS Heads of Tax Authorities meeting in New Delhi on Wednesday, Finance Minister Nirmala Sitharaman said “transfer pricing disputes cost developing-country administrations disproportionately”, and that revenue frameworks that don’t fit “our fiscal realities distort how we are seen and how we see ourselves.” Transfer pricing is the price at which companies within one multinational group trade with each other across borders; setting it wrongly shifts profits to low-tax countries. India will lead two proposed working groups: one on International Taxation and Transfer Pricing, to share experience on treaty interpretation, transfer-pricing audits, advance pricing agreements and the Mutual Agreement Procedure, and one on Revenue Statistics, to measure fiscal performance in a way that reflects BRICS economies’ own structures. The meeting also approved the terms of reference of the BRICS Tax Support Network. Revenue Secretary Arvind Shrivastava said the groups are proposed as longer-term mechanisms that will also help coordinate positions in talks on the proposed UN Framework Convention on International Tax Cooperation; ET notes India wants continuity beyond its current chairship. The syllabus link is GS2 on global groupings and GS3 on taxation.

Static syllabus linkage

1. BRICS has grown from four economies into a bloc of about a dozen with no secretariat. The acronym BRIC was coined by the Goldman Sachs economist Jim O’Neill in 2001, and the four countries held their first summit at Yekaterinburg in 2009; South Africa joined in 2010. At the Johannesburg summit of 2023, Egypt, Ethiopia, Iran and the United Arab Emirates were admitted and joined from January 2024, while Saudi Arabia’s status has remained ambiguous since its invitation; Indonesia joined in January 2025, and the Kazan summit of 2024 created a category of partner countries. The Hindu counts 11 member-countries at the Delhi summit. BRICS works by consensus under a rotating chair, with no charter or permanent secretariat, and India previously chaired it in 2012, 2016 and 2021.
2. The New Development Bank and the Contingent Reserve Arrangement are BRICS’s only hard institutions. Both were agreed at the Fortaleza summit in Brazil in 2014. The New Development Bank, headquartered in Shanghai, had an initial authorised capital of $100 billion and a subscribed capital of $50 billion shared equally among the five founders, who therefore hold equal votes — unlike the IMF and World Bank, where votes follow quotas. Its first President was India’s K.V. Kamath, and its membership has since widened to include Bangladesh, the UAE and Egypt. The Contingent Reserve Arrangement is not a fund but a $100 billion framework of currency-swap commitments, with China committing $41 billion, Brazil, India and Russia $18 billion each and South Africa $5 billion; only 30% of a member’s access is available without an IMF programme, so it complements rather than replaces the Bretton Woods system.
3. Transfer pricing, APAs and MAP are the everyday tools of cross-border tax disputes. Transfer-pricing rules require transactions between related companies in different countries to be priced at arm’s length — the price unrelated parties would agree on. India introduced its rules in 2001 under the Income-tax Act, 1961, the law replaced from April 2026 by the Income-tax Act, 2025. An Advance Pricing Agreement, introduced in India in 2012, fixes in advance the method for pricing a company’s international transactions for up to five years and, since 2014, can be rolled back to four earlier years; it may be unilateral, bilateral or multilateral. The Mutual Agreement Procedure, found in Article 25 of the OECD and UN model tax conventions and in India’s tax treaties, lets the competent authorities of two countries negotiate to remove double taxation.
4. The UN tax convention and the OECD’s two pillars are rival venues for global tax rules. In October 2021 the OECD/G20 Inclusive Framework agreed a two-pillar solution: Pillar One would reallocate a share of the residual profits of the largest, most profitable multinationals to the countries where their customers are, and Pillar Two sets a 15% global minimum effective tax rate for groups with annual revenue of at least €750 million. Pillar One has stalled, while Pillar Two has been adopted by many countries. In December 2023 the UN General Assembly adopted resolution 78/230, moved by Nigeria for the African Group, starting a process toward a UN Framework Convention on International Tax Cooperation, and negotiations on its text are under way. Developing countries favour the UN route because every state has an equal vote there.

Why UPSC loves this

1. BRICS and its institutions are staple Prelims material. Prelims has asked about the New Development Bank, including who set it up and where it is headquartered, and about the membership of groupings. The 2024 and 2025 expansions and the CRA’s structure are the obvious next questions.
2. Global tax governance joins GS2 and GS3. The term Base Erosion and Profit Shifting has appeared in Prelims, and Mains questions on the global minimum tax and taxation of the digital economy fit GS3. A BRICS tax track tied to the UN convention lets a candidate connect international institutions in GS2 with revenue mobilisation in GS3.
3. Examiners expect the lens of strategic autonomy and multi-alignment. Questions on India’s place in groupings that pull in different directions — the Quad and BRICS, the G7 outreach and the SCO — recur in GS2. The Hindu’s argument gives a ready thesis: internal divisions within BRICS stop any one member dominating, while shared dissatisfaction with the post-war order holds it together.

Analysis

1. “Plausible multilateralism” defends BRICS as a hedge, and understates the cost of expansion. George and Johny argue that BRICS’s internal divisions are a feature, since they stop any one country dominating. That is persuasive for the original five, but expansion has added states such as Iran and the UAE whose quarrels with each other and with the West raise the risk that BRICS is read as an anti-Western bloc. China’s economy is larger than those of the other four founders combined, so each new member courted by Beijing dilutes India’s relative weight. The image of Mr. Modi hand in hand with Mr. Pezeshkian, which the authors say will not fade soon in Washington, is a cost as well as a signal. BRICS works for India as a hedge only if India keeps setting the agenda, which is why its chairship deliverables matter.
2. The tax working groups show India turning a summit year into standing machinery. Rotating chairs usually leave behind a declaration and little else. By proposing two working groups as longer-term mechanisms and seeking continuity beyond its chairship, India is converting a one-year role into an institutional footprint in a technical field where it has real expertise. Tax cooperation is also low-drama, so members that disagree on Iran or Ukraine can still agree on audit practice. The counter-view is that BRICS tax interests diverge: China is a large capital exporter whose multinationals gain from residence-based taxation, while India, as a large market, wants more taxing rights at source. A common BRICS position at the UN may therefore be thinner than the announcement suggests, and India must be ready to lead a smaller coalition within the group.
3. Transfer pricing is where developing countries lose revenue and years. Ms. Sitharaman’s point that transfer-pricing disputes cost developing-country administrations disproportionately is about capacity as much as law. A multinational can hire global advisers to defend its intra-group prices, while a tax officer must find comparable transactions and audit complex chains alone. Sharing audit experience, advance pricing agreements and mutual agreement practice among BRICS administrations narrows that gap and reduces litigation. The counter-view is that investors may read coordinated audits as a new source of risk, and India’s own reputation still carries the memory of retrospective taxation, withdrawn only by the Taxation Laws (Amendment) Act, 2021. The working group will earn trust only if it produces faster settlements, not merely tougher audits.
4. Revenue statistics are a quiet fight about how the world grades developing economies. When Ms. Sitharaman says frameworks that ignore “fiscal realities distort how we are seen and how we see ourselves”, she is objecting to comparisons such as tax-to-GDP ratios drawn against rich-country benchmarks. Those comparisons shape the judgments of rating agencies and multilateral lenders but ignore large informal sectors, exempt farm incomes and federal revenue-sharing. A BRICS framework could produce fairer measures and a common language for arguing with lenders. The counter-view is that home-made statistics can look like a country grading its own exam; credibility requires that any new framework remain transparent and reconcilable with the IMF’s Government Finance Statistics standards.
5. The UN tax convention is the Global South’s venue, and India must decide how much to invest in it. Ms. Sitharaman says the next few years’ negotiations “will shape cross-border taxation for a generation”. The UN process offers one country, one vote, whereas the OECD framework was designed around the concerns of capital-exporting economies; Pillar One, which would have given market countries like India more taxing rights, has stalled. India’s interest as a large consumer market aligns with source-based taxation, which the UN route favours. The counter-view is that a convention negotiated without the full commitment of major capital exporters risks becoming a declaration among source countries with little bite. India’s best position is to use BRICS to shape the UN text while staying inside the OECD framework, so that it is a bridge rather than a camp.

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