Weeks after the visit of Chinese Foreign Minister Wang Yi to Delhi, India has agreed to attend a virtual summit of leaders of the Brazil-Russia-India-China-South Africa grouping, likely to be held at the end of June, sources here have confirmed.

The dates of the meeting, that will see Prime Minister Narendra Modi on the same platform as Russian President Vladimir Putin, Chinese President Xi Jinping and leaders of Brazil and South Africa for the first time since the Ukraine war began, are still being finalised, the sources said, although June 23-24 have been suggested as dates for the summit.

India hosted last year’s BRICS summit, which was also held virtually, and attended by the five leaders. This is the first summit hosted by China since the tensions broke out at the Line of Actual Control (LAC) due to the PLA’s transgressions in April 2020.

Ahead of this year’s summit, Chinese Foreign Minister Wang Yi visited Delhi last month, which was seen as possibly heralding a gradual normalisation of ties. His visit was notably the first since the LAC stand-off began.

Ahead of G-7 meet

Significantly, leaders of the G-7 grouping comprising Germany, France, the United Kingdom, Italy, Japan, Canada and the U.S. will meet in the Bavarian Alps on June 26-28, just a couple of days after the proposed BRICS summit. It is unclear whether PM Modi, who is already travelling for a bilateral meeting to Germany on May 1, is on the list of special invitees to the G-7 summit, which is still being prepared, officials said.

Meanwhile, a number of other preparatory meetings hosted for the BRICS summit are underway. In a meeting on April 12, BRICS health ministers including Mansukh Mandaviya held a virtual launch of the “BRICS Vaccine R&D Centre” to conduct “vaccine joint research, plant co-construction, authorised local production, and mutual recognition of standards”, the Chinese Ministry of Foreign Affairs said. On Tuesday, counter-terrorism officials will meet to discuss “targeted Financial Sanctions Related to Terrorism and Terrorist Financing” during a plenary session.

Trade options

Ahead of the summit, Sherpas of the five countries, including MEA Secretary for Multilateral and Economic Relations Dammu Ravi, met virtually on April 12-13, to discuss the dates and format of the meetings ahead. They also discussed the agenda, expected to include the Ukraine conflict, financial mechanisms to deal with sanctions against Russia, and cooperation against the Covid-19 pandemic.

In a statement released at the end of the Sherpa’s meetings, the Chinese MFA said BRICS countries clarified a “common position on the Ukraine issue” during the Sherpa meeting chaired by BRICS coordinator and Vice-Foreign Minister Ma Zhaoxu, expressing concern over the humanitarian situation in Ukraine, and support for multilateralism, adherence to the UN Charter, respect for the legitimate security concerns of all countries, and support for continued dialogue between Russia and Ukraine.

Speaking at the BRICS Finance Ministers meeting earlier this month, Russian Finance Minister Anton Siluanov called for the use of national currencies for BRICS countries, integration of payment systems and cards, their own financial messaging system and the creation of an independent BRICS rating agency. The measures would effectively circumvent some of the sanctions imposed by the U.S. and European Union, which none of the BRICS countries have joined.

While India and China have been engaging through the BRICS framework, on the bilateral front, India’s message to China over the past two years has been that it cannot be “business as usual” with the LAC crisis still unresolved.

Business with Beijing

One other area of normalcy is the trade front, where business has been booming. Two-way trade in 2021 reached $125 billion, crossing the $100 billion mark for the first time, driven by India’s imports of Chinese goods, most notably electronic products and chemicals, including Active Pharmaceutical Ingredients (APIs), which India’s pharma industry relies on.

Trade figures released last week showed the trend has continued into the new year, despite New Delhi’s avowed intention of diversifying imports and reducing trade with China, with imports in the first quarter of 2022 reaching $31.96 billion, up 15% from last year’s figure, which was itself a record. Since the start of the pandemic, India has also imported more medical supplies from China than any other country.

India has, however, kept in place measures to closely scrutinise Chinese investments. Chinese private equity and VC investments have fallen below $1 billion for the first time since 2017, according to research firm Venture Intelligence. New Delhi has also scrutinised the financial practices of Chinese companies in India, with the ED carrying out investigations and raids on a number of firms, including Xiaomi, Huawei and Oppo. Last week, the ED summoned Xiaomi’s former India head, and current Global VP, Manu Kumar Jain, over an investigation into whether it had complied with foreign exchange regulations.

Some investments from China have, however, been cleared. Minister of State for Commerce and Industry Som Parkash told Parliament last month India had received 347 FDI proposals from neighbouring countries since April 2020. Most are thought to be from China or China-linked firms, and of them, 66 had been cleared, while 193 had been rejected or withdrawn. Those cleared included investments in the auto, chemicals and electronics sectors.