New World on the Old Routes

Despite repeated warning from the USA President to impose hefty tariff on the BRICS bloc of fast-growing economies, including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the UAE and Indonesia, the recently concluded 17th BRICS Summit (July 6-7) in Rio de Janeiro, Brazil, tried to revive and reinvent a collective approach to the world’s problems. Experts observe that the expanded BRICS mechanism, with its vast economic scale, large populations, and significant contributions to the global economy, is gaining influence on the worldwide stage. Their collective voice and actions are crucial for upholding the multilateral trading system centered on the World Trade Organisation, strongly demonstrating that unilateralism and trade protectionism are ineffective and cannot intimidate the Global South.

Donald Trump’s Growing Apprehension about BRICS

Donald Trump is afraid of BRICS, as he has a reason to worry. Trump rightly perceives that BRICS is anti-Western, and the core of its mantra is to change the current global order, which the USA dominates. As BRICS leaders convened in Rio de Janeiro for their annual summit, Trump on Sunday (July 6) vowed to slap an additional 10 per cent tariff on any nation backing the group’s “anti-American policies”. Although his latest threat was much lower than the 100 per cent tariffs promised in January on countries that “play games with the dollar,” Trump remains adamant about the need to safeguard the US dollar as the world’s reserve currency.

Over the past decade, BRICS has swelled from four to ten members, including Indonesia, which joined in January. Saudi Arabia is listed as a member but has yet to confirm its status. The bloc also has nine partner countries, while dozens of others are lining up to join. The bloc, touted as China’s alternative to the G7 (Group of Seven) wealthy nations, now represents a quarter of the global economy and almost half of the world’s population. Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, Uzbekistan and Nigeria are ‘partner countries’ of the group. On July 6, Colombia and Uzbekistan joined the New Development Bank (NDB), expanding the membership of the multilateral lender commonly known as the BRICS Bank to eleven.

17th BRICS Summit: Major Issues

BRICS members signed a joint declaration encompassing 126 commitments covering global governance, finance, health, artificial intelligence, climate change, and other strategic areas. The document sealed the group’s commitment to strengthening multilateralism, defending international law, and striving for a more equitable global order.

Notwithstanding Trump’s threat, the Rio Declaration of the 17th BRICS Summit strongly condemned military strikes against Iran and expressed serious concern over deliberate attacks on civilian infrastructure and peaceful nuclear facilities under full safeguards of the International Atomic Energy Agency (IAEA), in violation of international law and relevant resolutions of the IAEA. The US bombers carried out the attacks on Iran’s nuclear facilities. The carefully worded declaration, did aim “unilateral tariff and non-tariff barriers” that “skew global trade and flout WTO (World Trade Organization) regulations”—a clear, though indirect critique of Trump’s protectionist agenda, before a deadline on Wednesday (9 July) for new US tariffs to kick in.

Significantly, the Trump administration’s 90-day pause on higher tariffs has expired on July 9 without any major bilateral deal with its trading partners, barring a limited trade deal with China, the UK, and Vietnam. It is reported that the Trump Administration has sent letters to inform dozens of countries of their new US import levy, which would be levied w.e.f. August 1, 2025. The bilateral trade deal with India is not yet finalised. It is reported that the Indian team will visit Washington for another round of talks.

The 17th Summit of the BRICS group of nations, in Rio de Janeiro, was both a dress rehearsal for the UN climate conference (COP30) in November and a rebuke to wealthier countries that have withdrawn to bunkers, launched missiles and choked off aid to poorer regions, observed the Guardian. Opening the BRICS conference, Luiz Inácio Lula da Silva, the President of Brazil, spelled out the dire global scenario. Eighty years after the defeat of fascism and the creation of the UN, “we have witnessed an unparalleled collapse of multilateralism”, he told the BRICS leaders. “Hard-won advances, such as climate and trade regimes, are under threat.” The autonomy of the BRICS group was being challenged, he warned. Reacting sharply on Trump’s additional tariff threat, he said while wrapping the Summit on Monday, “The world has changed. We don’t want an emperor”. President De Silva also added that “This is a set of countries that wants to find another way of organising the world from the economic perspective. I think that’s why the BRICS are making people uncomfortable.” After the spat with President De Silva, Donald Trump announced a 50 per cent tariff on Brazilian imports starting August 1, citing unfair trade practices and the treatment of former President Jair Bolsonaro!

The BRICS summit criticised NATO’s decision to hike military spending by 5 per cent of GDP annually by 2035. Leaders expressed “grave concern” for the humanitarian situation in Gaza, called for the release of all hostages, a return to the negotiating table, and reaffirmed their commitment to the two-state solution. At India’s behest, there was ample focus on terrorism in the declaration that urged zero tolerance for terrorism. The Declaration condemned, without naming any country, the terrorist attack in Jammu and Kashmir on April 22. The 18th Summit will be hosted by India in 2026. Under its presidency, India will work to define BRICS in a new form and it will be ‘Building Resilience and Innovation for Cooperation and Sustainability’, Prime Minister Narendra Modi said at the summit. Significantly, there was no mention of BRICS currency in the Declaration. It could be a strategic move to avoid any further confrontation with the USA. Moreover the US dollar is already on the decline.

Struggle for the Revival of the Land Trade Route

The group of seven (G7) developed countries — namely the USA, the UK, France, Canada, Italy, Germany, and Japan — gained their prominence in the global economy only after the discovery of sea routes from Europe to America and India. Till 1500 AD, China and India dominated the world economy. The emerging conflict between China-led Old World (BRICS) and the USA-led New World (G7) is a renewed attempt to regain the dominance of the Old World in the global economy, which they retained till the European colonial powers started dominating the sea. The Old World controlled its supply chain using a huge network of land routes across the Afro-Eurasian region stretching from East Asia to Africa. These huge networks of historical trade routes are now revived with the help of modern transport like railways.

Compared to the sea routes, mostly used by the New World economies, the rail networks are much faster and more reliable. Moreover, to protect the ships in international waters, the New World economies need to establish expensive military bases along the sea routes. The initiation of trade between Europeans and Japan marked a significant moment in the 16th century, particularly with the arrival of Portuguese traders. In 1543, Portuguese merchants reached the island of Tanegashima, where they introduced advanced firearms known as harquebuses to local lords, igniting a transformation in Japanese military technology. The Japanese quickly adapted and improved upon the Portuguese firearms, leading to the establishment of domestic gun-making enterprises. As firearms became commonplace, they significantly altered the dynamics of warfare in Japan.

Emerging Railway Network of BRICS

China initiated the Belt and Road Initiative (BRI) — also mentioned as the New Silk Road — which aims to develop a sustainable and resilient global supply chain. China is envisioning Southeast Asia as part of its Belt and Road Initiative (BRI), a vast overseas infrastructure development programme that was launched more than a decade ago. In 2021, the semi-high-speed Laos-China Railway opened to passengers, connecting the south-western Chinese commercial hub of Kunming to the Laotian capital of Vientiane with China’s help. Southeast Asia’s first bullet train began operating in Indonesia in October 2023, connecting the capital Jakarta with Bandung in West Java. A second high-speed rail project is underway in Thailand, which aims to connect the Laos-China Railway with Bangkok. Launching in phases, the Thai government currently expects the full line to be operational by 2028. And when that line is finally complete, the plan is to expand into northern Malaysia, where it will connect to the capital Kuala Lumpur before finally ending 350 kilometres down south in Singapore. China already boasts of the world’s largest high-speed railway network and Chinese firms have long been looking to sell and export their infrastructure technology to other countries.

The China-Europe freight train has become a vital bridge for trade and connectivity between China and Europe. Since its launch in 2011, the service has significantly transformed global trade, improving connectivity between China and Europe. Its cost is only one-fifth of air freight, and its transit time is one-quarter that of sea transport, which makes it highly favoured by many clients. The China-Europe Railway Express links many big cities. In China, trains start from Chongqing, Chengdu, and Xi’an. They go to European cities like Duisburg, Hamburg, and Madrid. The network covers 25 countries in Europe. It includes over 223 cities in Europe and more than 100 in Asia. Opened on January 1, 2017, the Yiwu–London railway line connects Yiwu, China, to London, United Kingdom, covering a distance of roughly 12,000 km. The international railway line between China and Russia is part of the great Trans-Siberian Railway network. Two trains are running between China and Russia: one follows the Trans-Mongolian Railway, traveling between Moscow and Beijing and crossing Mongolia; the other one goes through Manchuria, connecting Russia and China.

Iran received the first cargo train from China on 15 February. The train, which carried 32 containers of commercial products, left Yiwu in the northwestern province of Xinjiang in China on 29 January and traversed some 9,500 kilometres, passing through Kazakhstan and Turkmenistan before arriving in a Tehran railway station. China and Kazakhstan have announced the launch of a new freight rail transit line in March this year. The first freight train departed Chengdu in central China on March 4, heading for the Polish city of Lodz. The train, carrying televisions and other electronic components, has completed its 40-day journey, traversing Kazakhstan, Turkmenistan, Iran, and Turkey before reaching the European Union’s border. Pakistan and Russia have agreed to collaborate on establishing a robust rail and road network to link the South Asian country with Central Asia and Russia, providing landlocked states direct access to warm waters. In June, Pakistan and Afghanistan agreed to advance the Uzbekistan-Afghanistan-Pakistan (UAP) rail project, considered a key step toward regional connectivity.

China has invested huge money in constructing a railway network in Africa to transport critical minerals of African nations. Echoing the trends of the colonial era, China and the United States are engaged in a battle for access, resources, and influence along railways in Tanzania, Zambia, Angola, the Democratic Republic of Congo (DRC), Kenya and other mineral-rich countries. In a significant development, on the concluding day of the BRICS Summit, Brazil and China agreed on Monday (July 7) to study the feasibility of a transcontinental railway that could reshape South America’s trade routes by connecting Brazil’s Atlantic Ocean coast to Peru’s Pacific Ocean port of Chancay — built last year by China. The plan outlines a railway of about 4,500 kilometres, running from Ilhéus in the northern Brazilian state of Bahia to Rio Branco in the north western state of Acre, before crossing the Andes towards the Peruvian coast. If built, the corridor could shorten shipping times to Asia by as much as 12 days compared with current Atlantic routes that pass through the Panama Canal. Brazilian President Luiz Inácio Lula da Silva’s government considers access to the Pacific essential for strengthening ties with Asia and boosting agricultural and mineral exports.

Observations

India does not have suitable land connectivity either to East or West Asia. On its north, India’s relations with its neighbours — Pakistan and China — have been hostile since 1947 when Pakistan was created by the British rulers of India. In the East, India shares borders with China, Myanmar, and Bangladesh, with whom its relations are not pleasant. The other two neighbours, Nepal and Bhutan, are also surrounded by China to their east. But on the South and West, India enjoys vast coastlines which provide access to the Indian Ocean. This compels India to depend on sea routes for global trade. The newly proposed trade route — India Middle East Economic Corridor (IMEC) — a multimodal corridor that originates in India and ends in Europe, is primarily dependent on the sea. As per the plan, goods from India arrive at ports in the UAE, and are carried on trains that traverse the UAE, Saudi Arabia, and Jordan to Israel’s Haifa Port. From Haifa, it proceeds to ports in Greece, Italy, and France. The Palestine crisis has made it unviable at present.

The long presence of European colonists in India has created a powerful clientele class who are culturally pro-Western and inclined to the New World, dominated by the USA. Over the years, this has made India dependent on Europe and the USA for its security, education, and economic development. In this socio-economic context, the current rulers of India find it difficult to adapt to the BRICS bloc, dominated by the economies of the Old World who want to challenge the western dominance and rely more on land than sea for trade and cultural exchanges.

Views expressed are personal