India’s BRICS Trade Has Doubled to $417 Billion. Why Has the Deficit Tripled to $226 Billion?

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India's trade relationship with BRICS has become much bigger in just five years.

In FY2021, India's merchandise trade with BRICS countries stood at about $203.1 billion. By FY2026, it had more than doubled to $417.5 billion.

But there is a catch.

India exported goods worth only $95.7 billion to BRICS economies last year while importing $321.8 billion from them. The result was a $226.1 billion merchandise trade deficit, more than three times the $74.5 billion deficit recorded five years earlier.

That creates an unusual position for India.

BRICS has become increasingly important to India's trade, but much more as a source of goods than as a market for Indian goods.

And that may be one of the biggest economic questions left behind by the BRICS Summit held in New Delhi on September 12–13, 2026.

The challenge is not simply to import less from BRICS. India buys oil, machinery, electronics, industrial inputs and other goods that its economy genuinely needs.

The harder challenge is this:

India's BRICS trade doubled. But imports did most of the work

The headline growth looks impressive.

India's total goods trade with BRICS increased from $203.1 billion in FY2021 to $417.5 billion in FY2026, a rise of more than 100%.

But exports and imports followed very different paths.

Imports grew nearly three times as fast as exports.

BRICS economies supplied 41.5% of India's total merchandise imports in FY2026, up from 35.2% in FY2021. Yet they accounted for only 21.7% of India's merchandise exports.

The $226.1 billion BRICS deficit was also equivalent to roughly 68% of India's entire FY2026 merchandise trade deficit of $334.3 billion.

So the imbalance is large.

But before calling it a problem, it is important to understand what exactly India is importing.

A trade deficit is not automatically a bad thing

Suppose a country imports machinery that helps factories produce more.

Or crude oil that keeps transport, manufacturing and power running.

Or electronic components that are assembled into products eventually sold elsewhere.

Those imports create a trade deficit, but that does not necessarily mean the economy is becoming weaker.

This distinction matters for India because a meaningful part of its imports from BRICS countries consists of energy, industrial machinery, electronics, chemicals, commodities and manufacturing inputs.

So India's objective cannot simply be:

The more useful question is:

That is where the imbalance becomes more meaningful.

And when the deficit is broken down country by country, an even clearer story appears.

Most of the deficit comes from just three countries

India does not have the same trade relationship with every BRICS economy.

China, Russia and the UAE together supplied roughly $251 billion of goods to India in FY2026, accounting for nearly 84% of India's imports from its BRICS partners.

But each relationship looks very different.

Together, these three relationships account for roughly $190 billion of India's BRICS merchandise deficit.

But lumping all three together would hide what is actually happening.

China is India's structural trade problem

China alone accounts for almost half of India's BRICS trade deficit.

Indian imports from China increased from $65.2 billion in FY2021 to $131.6 billion in FY2026.

Indian exports went the other way, falling from $21.2 billion to $19.5 billion.

So the bilateral deficit reached about $112 billion.

Part of this imbalance exists because Chinese goods sit deep inside Indian supply chains.

India buys electronics, machinery, industrial equipment, chemicals, pharmaceutical inputs and components used across manufacturing.

That creates a difficult policy problem.

If some Chinese imports are inputs into Indian factories, simply restricting those imports can raise costs for Indian businesses unless domestic or alternative suppliers already exist.

Reducing dependence therefore requires more than trade restrictions.

India would need to manufacture more critical inputs locally, diversify suppliers and simultaneously win better access for Indian products in China.

This is why the India-China discussion at the BRICS Summit was significant.

During their September 12 meeting, Prime Minister Narendra Modi and Chinese President Xi Jinping specifically acknowledged the need to address structural trade imbalance, supply-chain issues and meaningful and predictable market access.

So India's largest BRICS trade imbalance was directly on the table.

Russia's deficit is a very different story

India's imports from Russia have changed dramatically since FY2021.

They increased from just $5.5 billion to $55.4 billion in five years.

Exports to Russia increased too, but much more slowly, from roughly $2.7 billion to $4.5 billion.

The result is a bilateral deficit of about $50.9 billion.

But unlike China, this is primarily an energy story.

India sharply increased purchases of Russian crude following the Russia-Ukraine war as discounted oil became available.

That means India's Russian deficit cannot be interpreted in the same way as its Chinese deficit.

One reflects deep dependence on industrial supply chains.

The other largely reflects a deliberate shift in where India buys energy.

In fact, cheaper crude can benefit the Indian economy even if it increases the bilateral merchandise deficit.

The real imbalance with Russia is that Indian exports have not grown anywhere close to the increase in imports.

The UAE shows that BRICS trade can look different

The UAE also gives India a merchandise deficit.

India imported nearly $64 billion of goods from the UAE in FY2026 and exported $37.4 billion, creating a gap of roughly $26.5 billion.

But there is an important difference.

The UAE is India's largest export market within BRICS, and Indian shipments to the country have increased by around 124% since FY2021.

That makes the UAE relationship much more two-sided.

India is a major buyer of crude oil and other commodities from the UAE, but it has also managed to build a substantial export market there.

That is closer to the model India would ideally like to develop with other BRICS partners.

So what exactly can India export to BRICS?

This is where the discussion becomes more difficult.

An ASSOCHAM study estimates that India could increase merchandise exports to BRICS economies from around $96 billion in FY2026 to $200 billion by 2030.

Potential sectors include engineering goods, electronics, automobiles and components, chemicals, pharmaceuticals, textiles, leather, gems and jewellery, rice, food products and marine products.

It is an opportunity estimate, not an official government export target.

And the number is ambitious.

Going from $95.7 billion to $200 billion in four years would require BRICS exports to grow at roughly 20% a year.

For comparison, India's exports to BRICS increased only about 49% over the previous five years.

So reaching $200 billion would require a significant acceleration.

The question is therefore not whether India has products to sell.

It clearly does.

The challenge is whether Indian companies can gain enough market access, distribution, pricing competitiveness and scale across very different BRICS economies.

BRICS is huge globally, but surprisingly weak internally

This is one of the more interesting contradictions.

The 11 BRICS economies exported around $5.67 trillion of goods globally in 2025 and imported about $4.58 trillion.

That left the grouping with a combined merchandise trade surplus of roughly:

BRICS is therefore an enormous force in world trade.

Yet only around 18.8% of BRICS exports go to other BRICS economies.

In other words, BRICS is not yet anything close to an EU-style integrated trading market.

Its countries remain heavily connected to buyers and suppliers outside the grouping.

Even intra-BRICS commerce is highly concentrated around China.

China alone exported about $550.8 billion to other BRICS economies and imported roughly $464.9 billion from them.

So simply expanding trade inside BRICS does not automatically create balanced opportunities for every member.

India could theoretically trade much more with BRICS and still see its deficit grow if imports continue to expand faster than exports.

What did the New Delhi BRICS Summit actually change?

The New Delhi Declaration recognised this broader challenge and put several trade-related mechanisms on the agenda.

BRICS members backed work on the Strategy for BRICS Economic Partnership 2030, aimed at guiding longer-term economic cooperation.

They also supported:

• deeper cooperation in global value chains,
• a BRICS GVC Action Plan 2026–2030,
• greater cooperation between Special Economic Zones,
• digitisation of trade documentation,
• credit frameworks for export-oriented MSMEs,
• and studying a BRICS invoice-discounting mechanism to improve working-capital access for smaller exporters.

These are potentially useful.

For example, an Indian MSME trying to export engineering products may struggle less because demand does not exist and more because financing, documentation, standards, logistics and market access make cross-border trade difficult.

Reducing these frictions can help.

But none of these measures instantly solves India's $226 billion deficit.

There was no BRICS-wide free-trade agreement or sweeping removal of tariffs announced at the summit.

What about trading in local currencies?

This is another area where BRICS discussions often become exaggerated.

The New Delhi Declaration supported continued work on improving cross-border payment systems and exploring settlement of trade and investment in BRICS members' local currencies.

But it also explicitly recognised that there is no one-size-fits-all approach.

BRICS is therefore not launching a common currency.

The grouping is trying to make transactions cheaper, faster and less dependent on a single payment route.

That can matter, particularly where sanctions, banking restrictions or dollar settlement create friction.

But payment currency cannot fix India's fundamental trade imbalance.

If India imports $100 worth of goods and exports only $20, settling the transaction in rupees, yuan or another currency changes how the payment happens.

It does not change the underlying $80 trade gap.

Ultimately, trade rebalancing requires India to sell more.

Services could become another part of the answer

There is one important caveat to the $226.1 billion figure.

It measures merchandise trade, meaning physical goods.

India's global external position looks considerably better once services are included because the country runs a large services trade surplus.

India's strength in IT services, consulting, financial services, digital solutions, healthcare, education and other professional services could also become an increasingly important part of its BRICS economic relationship.

But services should not be used to make the merchandise imbalance disappear.

The two tell different stories.

The goods deficit highlights India's dependence on imported energy, commodities and industrial inputs.

The services surplus highlights an area where India has strong global competitiveness.

A stronger BRICS strategy would ideally use both.

What would actually bring the $226 billion deficit down?

There is unlikely to be one solution.

India would need progress on several fronts at the same time.

This is the same challenge seen across India's wider import-substitution push.

India's challenge is not to trade less with BRICS

The numbers can easily lead to the wrong conclusion.

India buys $321.8 billion of goods from BRICS and sells only $95.7 billion.

That imbalance deserves attention.

But BRICS economies also supply India with energy, machinery, commodities and inputs that help the rest of the economy function.

So the goal should not simply be to shrink the relationship.

It should be to improve its composition.

India needs BRICS to become more than a source of oil, industrial inputs, machinery and commodities.

It also needs BRICS to become a much larger market for Indian manufactured goods, pharmaceuticals, engineering products, food, technology and services.

The New Delhi Summit has created mechanisms that could make some of that easier.

But frameworks, payment systems and trade-finance initiatives can only go so far.

Trade with the bloc has doubled.

Imports have more than doubled.

The next test is whether Indian exports can finally begin catching up.

FAQs

1. How much does India trade with BRICS countries?

India's merchandise trade with BRICS economies reached about $417.5 billion in FY2026, up from $203.1 billion in FY2021.

2. What is India's trade deficit with BRICS?

India exported $95.7 billion of goods to BRICS partners and imported $321.8 billion in FY2026, creating a $226.1 billion merchandise trade deficit.

3. Which BRICS country accounts for India's largest trade deficit?

China. India imported about $131.6 billion from China in FY2026 while exporting $19.5 billion, leaving a deficit of roughly $112 billion.

4. Why does India have such a large trade deficit with Russia?

The deficit expanded sharply after India increased imports of Russian energy, particularly crude oil. Imports reached $55.4 billion in FY2026 compared with only $4.5 billion of Indian exports.

5. Can India really increase BRICS exports to $200 billion?

ASSOCHAM estimates that Indian merchandise exports to BRICS could reach $200 billion by 2030 from around $96 billion in FY2026. Achieving that would require roughly 20% annual export growth over four years, making it an ambitious opportunity rather than a guaranteed outcome.

6. Is BRICS creating a common currency?

No. BRICS is exploring local-currency trade settlement and greater interoperability between cross-border payment systems. The 2026 New Delhi Declaration itself says there is no single approach suitable for every member.

7. Did the 2026 BRICS Summit solve India's trade deficit?

No. The summit advanced initiatives around trade finance, global value chains, local-currency payments, Special Economic Zones and trade digitisation, but these are longer-term facilitation measures rather than an immediate solution to India's trade imbalance.

Disclaimer: This article is for educational and informational purposes only. References to countries, industries, trade flows, economic policies and projections do not constitute investment advice or recommendations. Trade data, policy frameworks and forecasts can change with commodity prices, exchange rates, geopolitical developments and government policy.