Navigating New Global Trade Dynamics: Supply Chains and Emerging Trade Corridors
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October 21, 2026
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Amid intensifying competition and tension between major economic powers, middle economies are increasingly pursuing alternate economic and trade relationships, driven by a need for both greater strategic autonomy and deeper cooperation with one another. With a weakened United Nations (“UN”), World Trade Organization (“WTO”) and North Atlantic Treaty Organization (“NATO”) architecture and continuing geopolitical tensions in the Middle East and Ukraine, the year ahead will likely see further instability affecting key trade, energy and agricultural corridors, leading to continued shifting political winds and increased protectionist tendencies.
Through a range of regional, bilateral and multilateral platforms, economies outside of the ‘G2’ United States-China axis are establishing landmark Global North-Global South trade relationships. The 2026 BRICS Summit in New Delhi, Canada’s proposed European Union associate membership and Free Trade Agreements (“FTA”) signed by the EU and India are recent examples recent efforts to strengthen economic resilience in the face of these global developments by diversifying partnerships and giving emerging and middle economies greater agency within global governance.
For businesses operating across sectors such as technology, advanced manufacturing, clean energy, mobility and consumer goods, these developments may create new pathways for growth while reshaping existing trade and investment relationships. As economic cooperation expands across emerging and middle power economies, companies will need to evaluate new market opportunities, regulatory requirements and the potential to diversify supply chains and partnerships across markets.
The BRICS Summit Under India’s Chairmanship
Despite its share of sceptics, BRICS, an economic and political alliance alternative to NATO and G7, has given the Global South a greater voice in its lobal economic and governance discussions. Iran and the UAE backed the BRICS statement urging restraint in the Middle East during the 2026 Summit global economic and governance discussions,1 highlighting the bloc’s diplomatic significance. Meanwhile, China, India and Russia continue to pursue their respective interests and influence within the bloc During the summit.2 While the actual implementation of this cooperation is forthcoming, these goals are harbingers of how trade negotiations between the Global North and Global South could play out in the long term.
At the end of the summit, the Global South agenda highlighted:
Industrial Growth
- Frame BRICS Guiding Principles for Credit Assessment Frameworks for Export-oriented micro, small and medium enterprises (“MSMEs”), and build an Invoice Discounting Mechanism for BRICS members to facilitate invoice discounting and strengthen MSME participation in international trade.3
- Establish UN Industrial Development Organization (“UNIDO”)-supported BRICS Centre for Industrial Competencies, supported by national centres, including China and India.4
- Explore a proposed BRICS New Investment Platform to facilitate greater investment cooperation across member economies.5
- Advance BRICS collaboration on low-carbon hydrogen and a joint report on hydrogen value chains.6
Technology
- Expand cross-border payments through BRICS Payment Task Force, including greater interoperability of payment systems and messaging channels, and use of local currencies in trade and investment.7
- Progress plans for BRICS submarine cable infrastructure and a technical and economic feasibility study to establish a high-speed communication network.8
- Strengthen cyber resilience in the financial sector through a BRICS Rapid Information Security Channel and annual cyber exercises.9
Agriculture
- Launch the BRICS Agro-Inputs, Genetic Resources and Information Network (“AGRIN”) and a Global Forum on Farmers’ Rights in Seed Systems.10
- Establish BRICS Network of Centres of Excellence on Agroecology and Regenerative Agriculture for Climate Resilience and Productivity, and a BRICS Network on Digital Agriculture.11
- Establish BRICS Grain Exchange, with potential expansion into other products.12
Trade and Global Governance
- Support reform of the UN (including the UN Security Council) and the WTO13
- Oppose indiscriminate tariffs, non-tariff barriers and protectionist measures, including those justified on environmental grounds inconsistent with WTO rules14
Implications For Trade, Tech and Industrial Supply Chains
Broader trade and economic arrangements, such as the India-EU FTA, EU-MERCOSUR FTA and Canada-EU Associate Membership discussions, illustrate a wider trend towards economic diversification and the strengthening of regional and cross-regional partnerships. Alongside initiatives focused on resilient supply chains, local-currency settlement, digital public infrastructure, AI and low-carbon value chains, these developments signal the gradual emergence of alternative economic systems. Taken together, they point to a more diversified global economic architecture, with implications for sourcing, market access, technology partnerships, financing channels and regulatory requirements for businesses. This trend is also reflected in the financing mechanisms supporting these markets. At the BRICS Summit, the New Development Bank (“NDB”) announced plans to scale up local-currency financing, diversify its capital sources and mobilise resources for regional infrastructure projects.15 As these economic ties deepen and intra-bloc market access expands, global and domestic businesses can position themselves for growth by considering three key areas and their implications.
Cross-Border Trade Between India, China and Brazil
Rising intra-member investment between BRICS members, supported by initiatives such as the BRICS Centre for Industrial Competencies and the proposed New Investment Platform, is reshaping supplier ecosystems, joint-venture structures and manufacturing capacity across strategic sectors. While Chinese investment remains an important component of this trend, companies should view emerging BRICS-linked investment flows as part of a wider push to strengthen South-South industrial cooperation and market access. The key implication is the emergence of alternative South-South supply chains that could challenge traditional trade lanes, while creating new partnership and market-access opportunities for companies able to navigate local security, regulatory and industrial-policy priorities.
- India-China Trade: Heightened national security screening requires clear joint-venture (“JV”) structuring and local partnership alignment. India continues to apply enhanced scrutiny to investments requiring government approval, with approximately USD1.18 billion approved under the government approval route in FY25 to FY2616 Strategic JV structures in electronics manufacturing may offer a template for participation in sectors subject to heightened regulatory and security review.
- China-Brazil Trade: Chinese investment in Brazil reached USD6.1 billion across 52 projects in 2025, with heavy concentration in power, mining and e‑mobility.17 Mining outlays more than tripled to USD1.76 billion, while 31 green/sustainability projects (hydropower, solar, wind, electric vehicles) set a new record.18 This deepens China’s role in critical minerals and electric mobility in Brazil and, across Latin America, intensifies competitive pressure on Western original equipment manufacturers in green tech.
- Brazil-India Trade: The opening of high-value South-South supply chains beyond traditional Western trade lanes, together with greater investment in aerospace, defence, IT services and critical minerals, demonstrates these relationships are expanding beyond commodities into strategic and digital technologies.
Brazil offers a particularly resilient, commodity‑anchored platform for supply‑chain diversification into 2027 to 2029, with increasing access to China and EU markets under the interim EU-Mercosur trade agreement (in force since May 2026) and the new Mercosur-EFTA deal (effective October 2026).19, 20 As a self‑assertive middle power, Brazil is pursuing a multi‑alignment strategy (balancing the United States and China while amplifying its role in BRICS, the G20 and South‑South cooperation) to preserve strategic autonomy and diversify trade and technology partners. However, the October 2026 presidential election adds near‑term policy and fiscal uncertainty, with debt above approximately 75% of GDP, contested adjustment paths and ongoing implementation of the VAT‑style tax reform.21 The next administration’s choices on foreign policy, fiscal consolidation, industrial policy and trade regulation will establish the risk premium and investment climate for 2027 to 2030, even as Brazil currently deepens South‑South linkages (e.g., Africa, BRICS) and seeks to move up global value chains beyond commodities. Opportunities exist in agribusiness, mining, aerospace and advanced manufacturing. However, companies should consider a phased approach to investment and growth, supported by scenario planning around post‑election fiscal signals, microeconomic reforms and Brazil’s evolving foreign economic strategy. For supply‑chain leaders, Brazil is a strategic, though more complex, option to reduce concentration risk while monitoring regulatory, macro and geopolitical developments through the 2027 to 2029 planning cycle.
While BRICS cooperation is expanding across trade, industrial development and investment facilitation, companies should distinguish between the bloc’s strategic agenda and the regulatory realities of individual markets. Investment screening mechanisms, localisation requirements, technology-transfer expectations, data governance rules and sector-specific industrial policies will remain important considerations for sourcing, manufacturing and investment decisions across member economies.
Digital Transformation Of Payments And Growth Of Digital Public Infrastructure
The launch of a BRICS Payment Task Force study on integrating messaging and fast-payment systems22 and the creation of a BRICS Digital Public Infrastructure (“DPI”) Repository,23 with best practices to share open-source DPI stacks,24 were two significant developments prioritised by members.
India has been championing the expansion of country-specific and interoperable DPI solutions for the G20 and amongst BRICS economies to expand real-time payment systems, integrate digital identity with e-governance services, digital logistics, e-health, financial and digital inclusion, while respecting sovereignty, autonomy and data privacy principles.25 The development of such mechanisms points to greater interoperability and diversification of digital and payment infrastructure, rather than necessarily replacing existing global systems. The BRICS economies also released a public statement on the Global Governance of Artificial Intelligence at New Delhi during the summit.26 These developments could create opportunities for companies providing cross-border payment solutions, digital identity, cloud and data infrastructure, and AI-enabled services, while increasing the need to comply with country-specific requirements for data governance, cybersecurity, privacy and digital infrastructure. Global companies operating across BRICS markets may also face greater competition from domestic digital providers and need to adapt their products and partnerships to local regulatory and technical standards.
Global companies that work with government agencies in BRICS economies should anticipate stricter expectations regarding data governance, security and data residency, and the growth of domestic digital champions.
Green and Low-Carbon Supply Chains
The growth and establishment of low-carbon initiatives and carbon emissions trading mechanisms is expected to gain momentum, with some economies taking a lead on specific sectoral transitions and clean-technology adoption. As some of the largest carbon emitters, with significant hard-to-abate industries, BRICS economies are expected to drive substantial capital investment in industrial decarbonisation across the steel, cement, buildings, chemicals, fertiliser, agricultural and heavy-duty transport sectors. BRICS economies are also prioritizing the export competitiveness of MSMEs, including through low-carbon transition initiatives and more sustainable supply chains. Climate finance and joint low-carbon transition partnerships present significant opportunities for Global North-Global South collaboration, while greater support for the green and digital transformation of MSMEs and supply chains in BRICS economies gains momentum.
BRICS economies’ opposition to the EU Carbon Border Adjustment Mechanism (“CBAM”) hardened in 2026, moving from ministerial criticism in August to a formal Leaders’ Summit position that framed unilateral carbon measures as a constraint on developing countries’ climate and industrial transition. Rather than indicating opposition to decarbonisation, it reflects a preference for nationally determined transition pathways, climate finance and industrial policies that support economic development while reducing emissions.27 As the UK prepares to introduce similar rules, BRICS economies may increasingly challenge CBAM-type measures as non-tariff barriers to trade.28
Conclusion
The 2026 BRICS summit demonstrated that member economies are pushing for reforms to global institutions, such as the UN and WTO, that reflect a broader range of economic and development interests, while simultaneously developing their own mechanisms for trade, finance, payments, technology and industrial cooperation. Viewed alongside other emerging forms of Global South and Middle-Power cooperation, including the India-EU FTA, EU-MERCOSUR engagement and Canada-EU discussions, this points towards a more fragmented but opportunity-rich economic landscape in which companies will need to navigate increasingly complex trade, investment and supply chain ecosystems.
As economic and geopolitical relationships evolve worldwide, companies will need to look beyond traditional markets and assess where new sources of growth are emerging. This means evaluating new trade and financing channels, adapting to changing policy and regulatory environments and building partnerships with the Global South that support long-term resilience. Ultimately, competitive advantage will increasingly depend on the ability to engage with new centres of economic growth, capital and industry collaboration as they emerge across the Global South.
This article was co-authored by Amrit Singh Deo, Rachel Hsueh, Raquel Rocha, Snehil Singh, Udisha Ghosh and Xu Zheng.
Note: This is the first of a three-part series exploring new global trade and supply chain relationships between rising powers. The next part will focus on the India-EU and EU-MERCOSUR FTAs, and ongoing EU-ASEAN FTA negotiations.
Footnotes:
1: Sumayya Ismail, “Saudi Arabia, Iran to Join BRICS as Grouping Admits Six New Members,” Al Jazeera (24 August 2023).
2: Ministry of External Affairs, Government of India, “BRICS New Delhi Declaration: Building for Resilience, Innovation, Cooperation and Sustainability,” Ministry of External Affairs (12 September 2026).
3: Government of India, “India successfully concludes the 16th BRICS Trade Ministers’ Meeting in Jaipur under its BRICS Chairship 2026,” Press Information Bureau (7 August 2026).
4: Government of India, “BRICS New Delhi Declaration: Building for Resilience, Innovation, Cooperation and Sustainability,” Press Information Bureau (12 September 2026).
5: Ibid.
6: Ibid.
7: Ibid.
8: Ibid.
9: Ibid.
10: Ibid.
11: Ibid.
12: Ibid.
13: Ibid.
14: Ibid.
15: Ibid.
16: The Hindu Bureau, “India Approves Just 1 Chinese FDI Proposal Worth ₹1 Crore in FY26; 13 from Hong Kong,” The Hindu (8 August 2026).
17: Luciana Novaes Magalhaes, “Brazil tops global rankings for Chinese investment,” Reuters (7 May 2026).
18: Ibid.
19: “Mercosur,” European Free Trade Association (accessed 14 October 2026).
20: European Commission, “Application of the EU-Mercosur Interim Trade Agreement from 1 May 2026,” European Commission (1 May 2026).
21: Bernardo Caram, “Bolsonaro Campaign Drafts Debt-Linked Fiscal Rule to Replace Brazil Framework,” Reuters (11 August 2026).
22: Krity Ambey, Asit Ranjan Mishra, “India’s Payment Pitch Finds No Mention in BRICS Declaration,” Business Standard (14 September 2026).
23: “India Proposes DPI Repository, Capacity Building Centres for BRICS Nations,” Business Standard (11 September 2026).
24: Government of India, “India’s Digital Public Infrastructure,” Press Information Bureau (6 March 2026).
25: Government of India, “India Strengthens Global Digital Cooperation through Digital Public Infrastructure Partnerships with 24 Countries,” Press Information Bureau (29 July 2026).
26: Government of India, “BRICS New Delhi Declaration: Building for Resilience, Innovation, Cooperation and Sustainability,” Press Information Bureau (12 September 2026).
27: Nikhil Ghanekar, “BRICS Environment Ministers Oppose European Union’s Carbon Border Tax,” The Indian Express (19 August 2026).
28: Puja Das, “BRICS Backs Carbon Market Cooperation While Opposing Unilateral CBAM,” Down To Earth (12 September 2026).
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
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October 21, 2026
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