Growing BRICS trade key to unlock investment opportunities: SWFI

Lakshmi Narayanan Ramanujan of the Sovereign Wealth Fund Institute said growing trade among BRICS nations could attract significant sovereign wealth fund capital. He stressed the need for bilateral trade pacts to make this a reality.

Growing trade among BRICS countries could unlock significant trade opportunities and attract greater sovereign wealth fund capital into member economies, said Lakshmi Narayanan Ramanujan, Chairman of the Board at the Sovereign Wealth Fund Institute.

Sovereign Wealth vs Development Funds

Talking to ANI on the sidelines of the BRICS Summit 2026, Ramanujan highlighted the potential role of sovereign funds, noting that sovereign wealth funds typically seek investment opportunities across markets that can generate strong returns, while sovereign development funds are more focused on supporting domestic development. He added that several countries in the Gulf Cooperation Council (GCC) region have sovereign wealth funds, while Indonesia has also launched a new sovereign wealth fund. “Indian fund is called the sovereign development fund where they are inward focussing, not outward focussing,” he said.

Unlocking Capital for BRICS

“Currently, sovereign wealth funds, most of the portfolios are focused only on the US... BRICS nations don't have the capacity to absorb that capital,” he further stressed, adding, “Now, given this trade agreement, it will open up the door for the BRICS nations to absorb that capital.”

From Multilateral to Bilateral Agreements

As per Ramanujan, the focus now should be on increasing trade among member countries, with nations exploring bilateral as well as trilateral arrangements based on their economic priorities. “What we currently achieved in the BRICS is a multilateral cooperation agreement; multiple countries are signed accepting certain declarations, but to make it actionable, it will become a bilateral trade agreement between each and every country,” he said, stressing, “The importance now is to increase the business.”

As per Ramanujan, such arrangements could emerge as one of the key outcomes of greater BRICS cooperation and provide a significant push to trade among participating economies. “...every country will look at their own objectives and draft this, and that's what we look at from this BRICS, the greatest outcome, and this will push the trade huge,” he said.

Local Currencies and the US Dollar

When asked about the dollar, he said the BRICS push for local-currency trade is not aimed at replacing the US dollar but at enabling member countries to settle trade in their own currencies, though large trade imbalances remain a key challenge to making such a system work. "You can't avoid the dollar. Those currencies are pegged to the dollar...Indian money may not be pegged to the dollar, but when the dollar fluctuates, Indian money fluctuates...the bottom line, however, is the trade deficit," he said, adding, “The ultimate idea is to enable these 21 countries to accept each other's national currencies for mutual trade."

(ANI)

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