India seeks to avoid Trump's Brics wrath as it pursues US trade deal

With New Delhi set to assume the Brics chairmanship in 2026, India needs to differentiate itself from members like China and Russia, who are seeking to build the bloc as an opposition voice to the US

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By Ruchi Bhatia, Sudhi Ranjan Sen and Shruti Srivastava

 

India is trying to shield itself from President Donald Trump’s backlash against Brics by stressing it has no plans to challenge the US dollar’s global dominance, according to people familiar with the matter. 

The US leader has labeled the Brics group of developing nations “anti-American” and accused it of trying to undermine the dollar’s role as the world’s key currency. He has repeatedly warned of a 10 per cent tariff on all 10 Brics members, including India — even as he says a trade deal with New Delhi is near.

 

On Wednesday, Trump followed through with a new round of levies, including a 50 per cent tariff on Brazil, one of the highest so far announced for the tariffs which are set to hit in August. The letter to Brazil comes just after a two-day Brics summit in Rio de Janeiro, in which leaders agreed on a joint statement that criticized trade-distorting tariffs. 

 

But while Brazil and South Africa have blasted Trump separately for his anti-Brics comments, India has refrained from responding publicly, a sign that it’s treading a fine line in maintaining its relationship with Washington. 

 

Officials in New Delhi say they are watching Trump’s latest tariff threats closely, but see no immediate cause for alarm. The US leader’s view is that Brics is seeking to undermine the dominance of the US dollar, which is not India’s goal, the officials said, asking not to be identified because the discussions are private. India doesn’t support moves for a single Brics currency, and any participation in local currency trade arrangements is aimed solely at reducing risks, they said.

 

“Trump is unhappy with some Brics members who have been talking about an alternate reserve currency,” said Mohan Kumar, a former Indian envoy and lead negotiator at the World Trade Organization, who now teaches at OP Jindal Global University. “India has time and again differentiated between local currency trade and de-dollarization and therefore doesn’t fall in that category.”

 

With New Delhi set to assume the Brics chairmanship in 2026, it will need to differentiate itself from members like China and Russia, who are seeking to build the bloc as a stronger opposition voice to the US. India is betting that its strategic value to the US and its neutral currency stance will give the US reason to treat it differently than other Brics members. 

 

India’s Ministry of Commerce and Industry didn’t respond to an email seeking comment. Senior Indian diplomat P Kumaran said at a press briefing on Tuesday that Prime Minister Narendra Modi and his Brazilian counterpart Luiz Inacio Lula da Silva had “no discussion” on Trump’s tariff threats during the Indian leader’s state visit there. “We didn’t have an opportunity to discuss that.” 

India has been cultivated by several US administrations over the years as a strategic partner and key regional counterweight to an increasingly assertive China. As recently as April, US Vice President JD Vance remarked that the fate of the 21st century “is going to be determined by the strength of the United States and India partnership.”

 

Those ties have recently come under strain, though, after Trump took credit for brokering a ceasefire between India and Pakistan in May. Modi has pushed back at Trump’s claims he used trade as a bargaining tool to secure a truce. The Trump administration has also made overtures to Islamabad, including its powerful army chief, in the aftermath of the conflict, a source of concern in New Delhi.  

 

Much is riding on the success of the India-US trade deal, which both countries have pledged to finalize by the fall of this year. Shashi Tharoor, an opposition lawmaker who has led India’s diplomatic outreach since the Pakistan conflict, said a trade deal would signify the strong ties between the two countries.

 

“The relationship with the US is in a good shape,” he said in an interview in London on Tuesday. If the terms of the trade deal are agreed, “that will be a very, very healthy sign.”

 

After months of talks, Indian trade negotiators have put forward their best offer to the Trump administration and are now awaiting a response. 

 

The latest tariff threats from Trump may also be a bargaining tool to secure more concessions from New Delhi. Trump has previously threatened to slap 100 per cent levies on Brics if they ditch the dollar in bilateral trade. 

 

“We need to distinguish between President Trump’s narrative and his action,” Kumar said.