India’s USD 209 Billion BRICS Trade Deficit: Why MSME Exporters Are Struggling To Benefit

India’s trade gap with BRICS partners has become a growing concern for exporters as the bloc expands and intra-group commerce increases. A July 2025 trade analysis placed India’s aggregate goods trade deficit with BRICS countries at USD 209 billion in CY2024, nearly triple the USD 68 billion gap recorded in CY2020. For Indian MSMEs and exporters, the opportunities within the India-BRICS economy are real, but the benefits remain uneven because imports are rising faster than export access, particularly in goods trade.

What Is Behind India’s BRICS Trade Deficit?

India’s BRICS trade deficit is being driven less by weak engagement and more by an imbalance in the composition of trade. India imports large volumes of crude oil, petroleum-linked products, electronics, machinery, raw materials, and industrial inputs from key BRICS partners. However, many smaller exporters struggle to sell higher-value goods in those same markets at scale.

The result is a widening India trade balance problem: overall commerce is increasing, but exports are not expanding quickly enough to offset imports.

The gap is most visible with China and Russia. The same analysis placed India’s largest goods deficits within BRICS at USD 94 billion with China and USD 59 billion with Russia in CY2024. It also stated that India ran deficits with six of the 11 BRICS countries: China, Russia, South Africa, Saudi Arabia, the UAE, and Indonesia.

BRICS Trade Is Growing, but Gains Are Not Evenly Shared

Official comments from India’s Commerce Ministry show why the issue matters now. At the BRICS Contact Group on Trade and Economic Issues meeting in Gandhinagar in May 2026, Commerce Secretary Rajesh Agrawal said intra-BRICS merchandise trade had risen from USD 84 billion in 2003 to USD 1.17 trillion in 2024, while still accounting for only around 5 per cent of global trade.

He also said India’s exports to BRICS members were estimated at USD 82.0 billion in merchandise goods in FY 2025-26 and USD 31.3 billion in services in CY2024, based on the latest available data.

This creates a paradox for India’s export-import policy. BRICS is becoming a larger trading platform, but India’s import needs remain heavily concentrated in strategic commodities and industrial supply chains. Many MSME exporters, by contrast, operate in sectors where buyer discovery, certification, packaging, credit, and freight costs can determine whether an order is viable.

Key figures shaping the debate include:

• India’s bilateral goods trade with BRICS partners reached nearly USD 400 billion in CY2024.
• The aggregate goods deficit with BRICS reached USD 209 billion in CY2024.
• China and Russia accounted for the largest reported country-level gaps in the analysis.
• Intra-BRICS trade has significant room to grow, but official comments point to the need for more balanced trade and stronger value-chain linkages.

MSME Exporters Face Practical Barriers Beyond Tariffs

The challenge for MSMEs is not simply that BRICS markets are closed. Small firms often lack the information, networks, finance, and compliance capacity needed to convert demand into repeat export orders.

An Exim Bank survey of MSMEs found that 51.4 per cent of respondents viewed a lack of information about export opportunities as a major challenge, while 49.5 per cent cited a lack of relationships with foreign distributors, agents, and customers.

The same survey found that 44.9 per cent of respondents reported difficulty marketing products internationally. Around 43 per cent faced challenges obtaining financial support for exports, while nearly 28 per cent highlighted problems complying with regulatory frameworks in export markets.

These barriers directly affect MSME participation in India-BRICS trade because many BRICS markets require local buyer relationships, product adaptation, detailed documentation, and reliable delivery schedules.

For a small engineering, food-processing, textile, chemical, handicraft, or consumer-goods exporter, the gap between market potential and an actual shipment can be wide. A buyer may require product testing, packaging changes, language-specific documentation, local registrations, trade credit, or warehousing support. Larger firms can absorb these costs across bigger order volumes, but MSMEs often cannot.

Import Dependence Limits the Impact of Export Growth

The wider economic structure also contributes to India’s BRICS trade deficit. The country imports inputs that support domestic industry, energy security, refining, electronics assembly, and infrastructure. Such imports are not automatically negative, as they can support production and even re-export activity.

However, when the import bill rises faster than value-added exports, the trade deficit India faces becomes harder to narrow.

This is why the India-BRICS economy debate is moving beyond headline trade totals. Policymakers and exporters are increasingly focused on whether India can deepen manufacturing, improve product quality, expand services exports, and bring more MSMEs into cross-border supply chains.

Without that shift, BRICS may remain a major import corridor for India, while only a smaller group of exporters captures the benefits.

Government Support Is Shifting Towards Finance, Compliance, and Logistics

Recent policy measures suggest that the government is trying to address the constraints preventing smaller exporters from scaling. In 2026, the government approved the Export Promotion Mission with an outlay of Rs 25,060 crore for FY 2025-26 to FY 2030-31. The initiative aims to improve export competitiveness for MSMEs, first-time exporters, and labour-intensive sectors.

The mission includes support for trade finance, e-commerce exporters, testing and certification, overseas warehousing, freight disadvantages, and trade intelligence.

These interventions are relevant because MSME export problems are often operational rather than abstract. Lower-cost export factoring can ease working-capital pressure. Compliance support can help firms meet foreign testing and certification requirements. Freight and warehousing assistance can make smaller shipments more competitive, particularly for exporters outside established coastal or metropolitan trade clusters.

The Next Test Is Whether MSMEs Can Move Up the Value Chain

For India, the central issue is no longer whether BRICS trade will grow. The evidence shows that it already has. The more urgent question is whether Indian exporters, especially MSMEs, can move from fragmented, low-margin shipments towards branded, compliant, higher-value products that can compete in China, Russia, the UAE, Saudi Arabia, Brazil, South Africa, Indonesia, and other BRICS-linked markets.

If finance, logistics, buyer access, and compliance support reach smaller firms at the district level, the India-BRICS trade deficit could become less one-sided over time. If not, India may continue to participate deeply in BRICS commerce while many MSME exporters remain spectators to a market expanding around them.

Also Read: Why The West Misunderstands BRICS And Why China Shouldn’t Celebrate Just Yet