The BRICS countries are clearly intent on developing investment cooperation within the association, although this is currently complicated by a number of systemic problems, both external and internal. This is the leitmotif of a recent research article published in the Drukerovskij Vestnik on investment collaboration within BRICS. The economist Yana Matkovskaya, author of this study, answered questions from BRICS Business Magazine.
If we were to consider the BRICS countries as a single recipient of external investments, what would the dynamics look like?
It would be generally positive though depending on the specific period, of course. For instance, in the early 2020s, the annual growth of foreign direct investment (FDI) in the BRICS countries increased fourfold compared to the beginning of the century. The association’s share reached up to 20% of the global FDI inflow (over USD 350 billion).
Yet, if we compare this period with the second decade of the 21st century, we note a significant slowdown in FDI. This is explained by both global trends and those in the development of the BRICS economies. In China and Russia, FDI decreased, while Brazil experienced negative dynamics.
The structure of investment within BRICS is also changing. At the beginning of the century, China and Brazil accounted for more than 82% of all FDI, and Russia for less than 3.6%, but, by the beginning of the third decade, investment volumes had increased significantly in India (more than doubling), Russia (almost trebling), and South Africa (by almost 40%).
For a complete picture, it is important to remember that, at the beginning of the century, BRICS did not yet exist as an association. In addition, the recent expansion of the bloc’s membership will likely boost these indicators. By the beginning of the second quarter of 2026, relevant data will be expected to confirm this trend.
What do these figures say about the interest in the association on the part of investors from the external world?
Interest in BRICS from the external world is not homogeneous. Western countries and the Global South obviously assess the bloc differently. For the latter, membership in BRICS is becoming increasingly important, opening up new opportunities, including through development of the association’s institutions.
Initially, the BRICS countries attracted investors as states with rapidly growing economies. After South Africa joined, the bloc became transcontinental, and its appeal further increased owing to rising productivity and growth of the middle class. Since the 2024–2025 expansion, the list of appeal factors has expanded even more.
Even so, under current conditions, no exponential growth of FDI into BRICS countries should be expected. The association’s states are coming under external pressure, including as part of tariff policy, although this pressure was promptly reduced in severity.
At the same time, the bloc’s participants themselves, including new member countries and partner states, are obviously interested in developing intra-bloc investment.
Critics point out that cooperation within BRICS is characterized by a predominant share of traditionally established investment and trade ties. As a result, Russia, India, and China account for most intra-bloc investment activity. To some extent, this point of view may be fair. At the same time, more and more initiatives are being implemented precisely within the bloc itself, this being indicative of its development.
Which BRICS countries may be called investment leaders and how do Russia’s indicators look against this background?
Since the beginning of the century, the BRICS countries have become investment donors, this being the most important transformational trend. The volumes of their FDI within the bloc have more than tripled over the average indicators. The main investment direction is the countries of the Global South, a trend that appears to be stable.
In the medium term, intra-bloc investment cooperation is demonstrating steady, though sometimes uneven, growth. The leader in both FDI inflow and outflow is China; Russia and India show high activity; Brazil’s share is growing. It is too early to assess the expanded membership; the first confirmed data will appear at the end of the current year.
As for Russia, in terms of the average volume of FDI within BRICS since 2014, it holds second place within the association (almost USD 379 billion), significantly lagging behind China (almost USD 2 trillion), but ahead of South Africa (almost USD 55 billion). India and Brazil have recorded negative values in this period.
Speaking about the dynamics of intra-bloc FDI inflow/outflow within BRICS, the peak for the period from the beginning of the century until 2024 was the year 2021. 2022 saw a decline and, in 2023, volumes returned to the 2019 level. China remains the leader in FDI inflow, with Brazil in second place. South Africa is behind Russia although, in 2022–2023, the FDI inflow into the Russian Federation fell significantly (by more than USD 50 billion). China also has the biggest FDI outflow, while the other countries had negative values.
In 2024–2025, preliminary data indicate no conceptual changes in the dynamics.
As for specifically intra-bloc FDI, by the beginning of the third decade, its volume had increased by almost USD 147 billion. China showed the greatest, more than tenfold growth; Russia showed almost threefold growth; India showed a small growth (≈15%), while South Africa recorded a drop of 4%.
There are obviously industries in the BRICS economies that are the main beneficiaries of investment cooperation. Which are they?
Of course, the greatest investment within the bloc goes into production of LNG, petroleum products, and coal; automobile manufacturing (passenger and commercial vehicles); production of means of communication and communication equipment; metallurgy, wood processing, crop farming, animal husbandry; construction of commercial and institutional buildings.
Among the most obvious examples demonstrating the potential for cooperation within BRICS, I could mention a major Russian-Chinese LNG production project (over USD 11 billion), a Chinese-Brazilian project for production of communication equipment (USD 1.2 billion), and a Chinese-Indian project for production of trucks (about USD 1 billion). This list also includes a Russian-Indian oil and coal mining project (USD 850 million), as well as Russian-Chinese projects in the electric power industry and construction (USD 0.7 billion each).
What do you see as the main barriers hindering investment cooperation within BRICS?
The number of barriers remains significant. They include:
Some participants fear economic expansion by the more developed countries of the bloc and the risk of secondary sanctions.
The incomplete reform of International Investment Agreements (IIAs) and the deficit of intra-bloc agreements remain an important barrier. Work in this direction is under way but the countries take different approaches.
Despite the fragmentation, all BRICS countries view cooperation as promising. Moreover, the external pressure noted in recent months from the collective West has tended to stimulate further integration within the bloc.
When it comes to investment cooperation within the BRICS structure, the New Development Bank (NDB) established by the member countries is often mentioned. How would you assess its effectiveness?
According to its charter, the NDB’s aim consists in financing sustainable development infrastructure projects, including in the member countries. The Bank promotes investment cooperation through project financing and development of trade and economic ties. Its role is to develop transparent procedures for monitoring and approving projects.
The role of the NDB is difficult to overestimate, though its potential has not been fully realized. It is important that the BRICS countries have the experience and the will for strategic development of cooperation, which is important for the future of both the Bank and the bloc as a whole.
The NDB is not the only initiative. The Alliance of Exchanges and the Business Council are also developing, work is under way to create BRICS Clear payment systems. At the summit in July 2025, discussions began on launching a new investment platform. The Kazan Declaration recorded an agreement on transforming the NDB into a new type of multilateral development bank.
At the same time, in your research you write: “The volume of NDB financing for Russian projects was small even in 2014–2021 and, in 2022–2025, it was zero.” In this context, the obvious question arises whether Russia’s participation in the NDB is still expedient.
Suspension of the already insignificant financing of Russian projects in 2022–2024 did, indeed, raise questions. Even so, in light of positive changes, decisions to resume and increase financing volumes, a negative assessment would be illogical. Russia’s participation in the NDB should not be viewed through the paradigm of pros and cons, as the development of BRICS institutions is always progressive. The current situation once again highlights the areas for improving the NDB’s work and such activities are under way.
Many people who have spoken with BRICS Business Magazine, discussing the potential for investment cooperation within the bloc, use examples from the high-tech sphere. You, it seems, also see a close connection between investment and scientific-technical cooperation between the BRICS countries.
The interconnection is extremely significant. Development of scientific and technical cooperation (STC) creates a solid foundation for investment, and vice versa. This applies to all levels, from cooperation between individual corporations to projects at the Megascience level. The potential for developing intra-bloc STC exists among the BRICS countries, as does genuine interest in this. The number of promising areas is growing but measures are needed to increase the intensity and effectiveness of this collaboration. Not only new institutions are required but also the conditions for effective STC coordination.
