New Delhi: Prime Minister Narendra Modi met Iranian President Masoud Pezeshkian in New Delhi on Friday on the sidelines of the BRICS Summit, as the expanded grouping turned its attention to trade, financial cooperation and efforts to reduce dependence on the US dollar.
The meeting came ahead of the two-day BRICS Leaders’ Summit, being hosted by India on September 12 and 13. The 11-member grouping is meeting against the backdrop of conflicts in West Asia and Ukraine, growing economic uncertainty and increasing calls among some members for a more diversified global financial system.
Modi-Pezeshkian Meeting Focuses on Bilateral and Regional Issues
Modi and Pezeshkian discussed India-Iran relations as well as developments in West Asia. The meeting is particularly significant as it comes amid heightened tensions in the region and growing concerns over energy supplies and international shipping routes.
India has consistently called for dialogue and diplomacy to resolve conflicts in West Asia. During an earlier meeting with Pezeshkian at the Shanghai Cooperation Organisation summit in Bishkek, Modi stressed the importance of protecting freedom of navigation, commerce and commercial shipping.
The two countries also have important economic and connectivity interests, including India’s involvement in Iran’s Chabahar Port, which provides India with a strategic route toward Afghanistan and Central Asia.
Iran Backs Stronger BRICS Financial Architecture
Iran has emerged as one of the members pushing for greater financial cooperation within BRICS. Tehran has argued for stronger institutions capable of supporting trade and investment among member countries while reducing vulnerability to Western sanctions and dollar-based financial channels.
Iran is also expected to join the New Development Bank (NDB), the multilateral development institution established by the BRICS founding members. Reuters reported last month that Iran was expected to join the bank soon.
The NDB has increasingly been viewed as one of BRICS’ most important financial institutions. It has approved billions of dollars in development lending since its creation and is intended to provide an alternative source of financing for infrastructure and sustainable-development projects.
Can BRICS Challenge Dollar Dominance?
The growing discussion around the BRICS financial system has renewed debate over the future role of the US dollar in global trade.
BRICS countries are exploring greater use of local currencies, cross-border payment connectivity and alternative financial mechanisms. The objective is not necessarily to immediately replace the dollar, but to give member countries additional options for conducting international trade and settling payments.
Finance ministers and central bank governors from BRICS countries have already called for improvements in cross-border payment systems and continued work by the BRICS Payment Task Force.
However, India has maintained a more cautious position on the issue. Reports ahead of the summit indicate that New Delhi does not support turning BRICS into an explicitly anti-dollar or anti-Western bloc. India instead wants BRICS to remain focused on economic cooperation, development and a greater voice for the Global South.
New Development Bank Could Become More Important
The New Development Bank could play a central role if BRICS members succeed in expanding financing in local currencies and increasing cooperation among their financial systems.
The bank was established by Brazil, Russia, India, China and South Africa and has subsequently expanded its membership. Its role is different from that of a central bank or a replacement for the US Federal Reserve, but its growing lending capacity gives BRICS an institutional mechanism to finance development projects outside traditional Western-led institutions.
According to the Financial Times, the NDB had approved about $43 billion in lending by early 2026, compared with the much larger global lending volume of the World Bank.
India Faces a Delicate Balancing Act
For India, the summit presents both an opportunity and a diplomatic challenge.
New Delhi wants stronger economic cooperation with Russia, Iran and other emerging economies while simultaneously maintaining important relations with the United States, Europe and other Western partners.
The presence of Russian President Vladimir Putin, Iranian President Pezeshkian and Chinese President Xi Jinping makes the New Delhi summit particularly important. BRICS now represents around half of the world’s population and roughly 40% of global GDP on a purchasing-power-parity basis, giving the grouping considerable economic weight.
At the same time, differences among members over China’s role, geopolitical conflicts and the pace of financial de-dollarisation could make consensus difficult.
A Shift Toward a Multipolar Financial System?
The Modi-Pezeshkian meeting and the wider BRICS discussions highlight a broader transformation underway in the global economy.
Rather than an immediate replacement of the dollar, BRICS appears to be moving toward a system where countries have more choices in trade settlements, development finance and cross-border payments.
Whether the New Development Bank and emerging BRICS payment initiatives can eventually reduce the dollar’s dominance will depend on the group’s ability to overcome internal differences and build practical, widely accepted financial infrastructure.
For India, the priority will likely be to push for a more multipolar global economy without turning BRICS into a confrontation with the existing Western financial system. The New Delhi summit could therefore become an important test of whether BRICS can translate its growing economic influence into concrete financial cooperation.
