India has called for greater intra-BRICS trade in each other’s currency for protection from fluctuations causing losses, even as the five major emerging economies agreed to set up a joint ‘single window clearance mechanism’ for ease of doing business and cooperate in matters including e-commerce and Intellectual Property Rights.
Speaking on Thursday at the launch of the first BRICS Trade Fair, India’s Vice President M. Hamid Ansari said: “We (BRICS countries — Brazil, Russia, India, China and South Africa) need to increase our trade in each other’s currency to further pluralise trading currencies and lessen the use of a single dominant currency.”
“Transition to trade in national currencies will reduce the risk volatility and protect us from adverse fluctuations, which often cause huge economic and trade losses,” he added.
Ansari said BRICS would need to push services trade liberalisation, including through measures for easier movement of people for commercial activity. “The proposal for a BRICS Visa on a long-term basis for genuine travellers is one such effort aimed at stimulating greater economic activity by enhanced mobility of our entrepreneurs,” he said.
BRICS account for 43 per cent of the world’s population, 15 per cent of global trade and 20 per cent of the world’s investment flows. However, intra-BRICS trade in 2014 was just $297 billion — less than five per cent of the $6.5 trillion worth trade that the five countries had with the world that year.
Besides creation of a business-friendly environment for investors and entrepreneurs, BRICS nations should support value-added trade to transform from raw material providers into key players in the global economy, Ansari said.
The BRICS trade ministers’ communiqué took note of volatility in the equity and currency markets, strains on the banking sector, depressed global demand as well as low commodity and oil prices. They agreed to enhance cooperation on preserving policy space to promote industrialisation.
They decided to address the impediments faced by small and medium firms, and agreed on a mechanism to resolve non-tariff measures. Besides, they decided to promote a better understanding of each other’s quality standards. A BRICS single window would help boost trade and investment through easier clearances, they said.
Indian commerce minister Nirmala Sitharaman said BRICS nations can play a positive role in strengthening multilateral institutions including the IMF, United Nations and World Trade Organisation. She also stressed on the need for rolling back protectionist measures to boost global trade. Sitharaman said the BRICS Bank should come up with ideas to finance projects in BRICS nations and consider extending support to BIMSTEC nations as well.
Earlier, in a bilateral meeting, India and Brazil looked into a proposal to strengthen the India-MERCOSUR (a trading bloc and customs union of Latin American nations including Brazil) Preferential Trade Agreement by expanding the coverage of items from 450 to 2500. India also asked Brazil to host India-Latin American Conclaves in Brazil to boost trade and investment ties. In another bilateral meeting, China agreed to look into India’s demand for greater market access for rice and pharmaceuticals as well IT services in China.