Rise of Global South and Health Taxes Shape New World Order: India’s Pivotal Role

Date:

New Delhi : In a rapidly evolving global landscape, the rise of the Global South and strategic health tax initiatives are reshaping the world order, with India emerging as a key player. Prime Minister Narendra Modi, addressing Ghana’s Parliament on Thursday, July 3, 2025, emphasized that the post-World War II global framework is undergoing a seismic shift, driven by the growing influence of developing nations and changing demographics. This transformation is further amplified by innovative public health strategies, such as health taxes on tobacco, alcohol, and sugary drinks, which aim to curb noncommunicable diseases (NCDs) while generating substantial revenue for global development.

India Leads the Global South Shaping a New World Order with BRICS+ Expansion and Health Tax Initiatives.
India Leads the Global South: Shaping a New World Order with BRICS+ Expansion and Health Tax Initiatives.

The Rise of the Global South: A New World Order

The concept of the Global South refers to technically and socially less-developed countries, primarily located in the Southern Hemisphere across Africa, Asia, and Latin America. The Brandt Report, a seminal document, proposed a division between North and South based on technological advancement, GDP, and other socioeconomic parameters. Today, the Global South accounts for 40% of world trade, according to the United Nations Conference on Trade and Development (UNCTAD), with countries like India and China driving significant economic growth. This economic surge has altered global dynamics, positioning the Global South as a formidable force in reshaping international relations.

The post-World War II era initially saw a bipolar world dominated by the United States and the Soviet Union. Following the Soviet Union’s dissolution in 1991, the U.S. emerged as the sole superpower, ushering in a unipolar world order. However, the rapid rise of the Global South is now fostering a multipolar framework. This shift is characterized by economic growth, assertive diplomacy, and the establishment of alternative institutions like the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA). Additionally, vibrant South-South cooperation, demographic dividends, and advocacy for reforms in global organizations like the United Nations and the G77 are amplifying the Global South’s influence.

A significant milestone in this transformation is the BRICS+ expansion. On January 1, 2024, BRICS—originally comprising Brazil, Russia, India, China, and South Africa—welcomed six new members: Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, and Indonesia. This expansion has transformed BRICS into a coalition representing nearly half of the world’s population and approximately 37% of global GDP in purchasing power parity (PPP). With new members like Saudi Arabia, Iran, and the UAE, BRICS now accounts for 45% of global oil production, enhancing its energy influence and supporting initiatives like de-dollarization, where trade in local currencies such as rupees or yuan is prioritized to reduce reliance on Western financial systems.

India’s Strategic Role in BRICS+ and Global South Leadership

India’s role within the expanded BRICS+ framework is pivotal. Prime Minister Narendra Modi’s five-nation tour, including a key stop in Brazil for the BRICS Summit in July 2025, underscores New Delhi’s commitment to shaping this evolving coalition. The summit, set to focus on BRICS+ expansion, aims to align the group’s priorities with development, equity, and a multipolar world order. India views BRICS as a platform to promote global leadership and strategic autonomy, balancing its relationships with Western democracies and BRICS partners like Russia and Iran.

The inclusion of nations like Egypt and Ethiopia, longstanding strategic partners of India, opens new avenues for trade, energy security, and geopolitical engagement. With major energy suppliers now part of BRICS, India gains leverage to diversify supply chains and secure imports at competitive terms. Increased intra-BRICS trade is expected to boost Indian exports in textiles, machinery, and technology, reinforcing India’s bid to become a leader in South-South cooperation. This cooperation involves the exchange of resources, technology, and knowledge among developing countries, fostering mutual growth.

However, challenges remain. Internal divisions, such as China’s push for geopolitical dominance versus India’s insistence on defined membership criteria, could hinder BRICS cohesion. The diverse membership, spanning democracies and authoritarian states, creates coordination challenges, particularly on contentious issues. Consensus-based decision-making may also slow the group’s ability to act decisively. Despite these hurdles, India’s robust ties with both Western democracies and BRICS nations position it as a unique bridge, advocating for global governance reform without succumbing to great-power rivalry.

The New Development Bank (NDB) is a cornerstone of BRICS’ financial strategy. With new members, the NDB’s capacity to fund South-South infrastructure and sustainability projects outside Western-led institutions is significantly enhanced. According to Reuters, BRICS+ plans to establish a new multilateral guarantee fund through the NDB to catalyze private sector investment in member economies, with pilot programs expected in 2026. This initiative aligns with India’s vision of fostering inclusive global governance and economic resilience.

Health Taxes: A Game-Changer for Public Health and Revenue

Parallel to the geopolitical shifts, a groundbreaking health tax initiative is gaining momentum globally. Launched as a collaborative alliance involving development partners, civil society, academic institutions, and national governments, this initiative aims to raise prices on tobacco, alcohol, and sugary drinks by at least 50% through health taxes over the next decade. The World Health Organization (WHO) recommends taxation as one of the most cost-effective tools to address obesity and NCDs, which account for over 75% of global deaths.

What Are Health Taxes?

Health taxes are levies imposed on products with negative public health impacts, such as tobacco, alcohol, and sugary drinks. These taxes aim to reduce consumption, mitigate health risks, and generate revenue for public welfare. The health and economic impacts of these products are profound:

  • Health Impact: Consumption of tobacco, alcohol, and sugary drinks fuels the NCD epidemic, including diseases like diabetes, heart disease, and cancer.
  • Economic Impact: These products create negative externalities (costs borne by society) and internalities (hidden costs to consumers). For instance, tobacco use alone cost the global economy US$ 1.4 trillion in 2012.
  • Revenue Generation: A 50% tax could generate up to US$ 3.7 trillion in new revenue globally within five years, averaging US$ 740 billion annually—equivalent to 0.75% of global GDP.
  • Promoting Equity: NCDs disproportionately affect lower-income populations, and health taxes can reduce these disparities by discouraging harmful consumption and funding public health programs.

The initiative is projected to mobilize an additional US$ 1 trillion in public revenue globally over the next decade, providing a significant boost to development financing, particularly for Global South nations.

India’s Efforts in Health Taxation

India has taken proactive steps to curb the consumption of unhealthy products. Aerated beverages are taxed at a 28% Goods and Services Tax (GST) rate, with an additional 12% compensation cess. High-fat, sugar, and salt (HFSS) foods are subject to a 12% GST rate. Additionally, the Food Safety and Standards Authority of India (FSSAI) has limited trans fatty acids (TFA) in food products to 2% by mass of total oils and fats, aligning with global health standards to reduce NCD risks.

Global South’s Demographic and Diplomatic Strength

The Global South’s influence is further bolstered by its demographic strength, with many nations experiencing a demographic dividend—a youthful, working-age population that drives economic growth. This demographic advantage, coupled with assertive diplomacy, is reshaping global governance. For instance, the establishment of the loss and damage fund at COP27 reflects the Global South’s growing clout in international negotiations. Countries are also pushing for reforms in global institutions like the United Nations, advocating for greater representation and equity.

South-South cooperation is another critical driver. By fostering collaboration among developing nations, the Global South is creating alternative pathways for development, independent of traditional Western-led frameworks. Initiatives like the NDB and CRA exemplify this trend, providing financial and economic support tailored to the needs of emerging economies.

Challenges and Opportunities for India

For India, the BRICS+ expansion and the rise of the Global South present both opportunities and challenges. The inclusion of energy-rich nations like Saudi Arabia and Iran enhances India’s energy security, but navigating internal BRICS dynamics requires diplomatic finesse. India’s strategic autonomy allows it to balance relationships with the U.S. and BRICS partners, fostering cooperation without alienating key allies.

The health tax initiative aligns with India’s domestic priorities, such as reducing NCDs and generating revenue for public welfare. By leveraging its leadership in BRICS and the Global South, India can advocate for global health tax frameworks that prioritize equity and development. The upcoming BRICS Summit in Rio offers a platform for India to shape these agendas, reinforcing its role as a voice for the Global South.

Conclusion

The rise of the Global South, coupled with innovative health tax initiatives, is reshaping the world order, moving it toward a multipolar framework driven by equity and cooperation. India, with its strategic position in BRICS+ and proactive health policies, is at the forefront of this transformation. As Prime Minister Modi prepares for the 2025 BRICS Summit, India’s commitment to global leadership, sustainable development, and public health innovation will continue to define its role in the new world order. By balancing economic growth, diplomatic assertiveness, and health equity, India is not only shaping its future but also that of the Global South and the world at large.

Frequently Asked Questions (FAQs)

1. What is the Global South, and how is it reshaping the world order?

2. What are health taxes, and why are they important?

3. How is India contributing to the health tax initiative?

4. What is the significance of the BRICS+ expansion for India?

5. What challenges does the expanded BRICS face?

politicalsciencesolution.com
politicalsciencesolution.comhttp://politicalsciencesolution.com
Political Science Solution offers comprehensive insights into political science, focusing on exam prep, mentorship, and high-quality content for students and enthusiasts alike.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_img

Popular

More like this
Related

You cannot copy content of this page