BRICS Summit Goa 16
The Prime Minister, Shri Narendra Modi addressing the BRICS Leaders' meeting with the BRICS Business Council, at the BRICS Summit-2016, in Goa on October 16, 2016.PIB/PressRelease

The five-country group Brics (which includes Brazil, Russia, India, China and South Africa) has agreed to set up an independent credit rating agency based on market principles , saying it would further strengthen global governance architecture.

"We believe that BRICS institution-building is critical to our shared vision of transforming the global financial architecture to one based on the principles of fairness and equity to further bridge the gap in the global financial architecture, we agreed to fast-track the setting up of a BRICS Rating Agency," Prime Minister Narendra Modi said in a statement at the conclusion of the Brics Summit in Goa.

Read: Full text of Goa Declaration adopted by India, China, Russia, Brazil and South Africa at BRICS Summit 2016

The five member countries set up a New Development Bank or NDB, which came into effect last year. The leaders urged the Shanghai-based bank (a rival to the West dominated World Bank) to focus on funding specific development priorities of the members and create a network of investors, NDTV reported.

New Development Bank president KV Kamath had raised concerns over methodologies of the three global agencies (S&P, Fitch, and Moody's) saying that these "constrain" growth amongst the emerging nations. Despite having deep capital buffers, the ratings of the multilateral banks like the Brics-promoted NDB bank were affected by the parent countries' ratings.

Specific agreements were signed to set up research centres in the areas of agriculture, railways and a Brics council was also agreed upon. While there have been talks for greater cooperation on trade and economy, the point of friction between India and China remained the issue. China, an ally of Pakistan, refused to blame Pakistan for the Uri attacks, while India has called for Chinese goods to be boycotted, Press Trust of India reported.

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