BRICS trade growth seen drawing more sovereign wealth capital
SWFI board chair Lakshmi Narayanan Ramanujan says growing BRICS trade could draw more sovereign wealth capital into member economies.
Expanding trade among BRICS countries could open up significant business opportunities and draw more sovereign wealth fund capital into member economies, Lakshmi Narayanan Ramanujan, Chairman of the Board at the Sovereign Wealth Fund Institute, said on the sidelines of the BRICS Summit 2026.
Ramanujan drew a distinction between the two types of state-backed funds. Sovereign wealth funds typically look for investment opportunities across markets that can deliver strong returns, while sovereign development funds are oriented towards supporting domestic development. He noted that several Gulf Cooperation Council countries have sovereign wealth funds, and that Indonesia has launched a new one. India's fund, he said, is a sovereign development fund that focuses inward rather than outward.
A key constraint, according to Ramanujan, is where sovereign wealth capital currently sits. Most portfolios are concentrated in the United States, and BRICS nations have not had the capacity to absorb that capital. A trade agreement, he said, would open the door for member economies to take in a larger share.
He argued that the priority now should be to raise trade volumes among member countries, with nations pursuing bilateral and trilateral arrangements shaped by their own economic priorities. The multilateral cooperation agreement reached within BRICS, under which multiple countries have signed on to certain declarations, needs to become actionable through bilateral trade agreements between individual countries, he said. Such arrangements could emerge as one of the bloc's most significant outcomes and give trade a substantial push.
On the question of the dollar, Ramanujan said the BRICS push for local-currency trade is not aimed at replacing the US dollar but at allowing member countries to settle trade in their own currencies. He pointed out that the dollar cannot be avoided, as many currencies are pegged to it, and that fluctuations in the dollar are transmitted to other currencies. Large trade imbalances, he added, remain the central challenge to making such a system work. The ultimate aim, he said, is to enable the 21 countries to accept each other's national currencies for mutual trade.