Iranian state media reported on Thursday that Araqchi made the remarks after an exchange with the Emirati delegation at the BRICS gathering, where divisions over the Iran war threatened efforts to issue a joint communique.

“I didn’t name the UAE in my statement for the sake of unity,” Araqchi was quoted as saying. “But the truth is that the UAE was directly involved in the aggression against my country.”

Iranian media did not specify the comments made by the Emirati representative that prompted the response.

The diplomatic dispute followed the UAE’s denial this week of claims by Israeli Prime Minister Benjamin Netanyahu that he had visited the Gulf state during the ongoing Iran conflict.

Araqchi had earlier warned that countries “colluding with Israel to sow division will be held to account,” remarks widely interpreted by regional analysts as directed toward Gulf states accused by Tehran of covert coordination with Israel and the United States.

The Iran war began on Feb. 28 with U.S. and Israeli strikes targeting Iranian facilities, prompting retaliatory missile and drone attacks by Tehran against U.S. bases and other targets across Gulf countries.

Iranian officials have increasingly accused regional governments of facilitating military operations against the Islamic republic, particularly states hosting U.S. military installations.

According to Iranian state media, Araqchi argued during the BRICS meeting that reliance on U.S. military bases and security cooperation with Israel would not guarantee the UAE’s stability.

“We must live side by side in peace, and this requires peaceful relations and complete understanding between the two countries,” he said.

The Wall Street Journal reported earlier this week that the UAE conducted military operations against Iran in early April. Reuters could not independently verify the report. Western and Iranian officials have also said Saudi Arabia carried out multiple unpublicized strikes against Iranian targets during the conflict.

The growing friction between Tehran and Abu Dhabi has complicated diplomatic dynamics within BRICS, the bloc comprising Brazil, Russia, India, China, South Africa and several recently admitted members, including Iran and the UAE.

Iranian media cited Deputy Foreign Minister Kazem Gharibabadi as saying there were “problems and communications” within the summit process because of the UAE’s participation.

The meeting in New Delhi was expected to focus on geopolitical coordination, trade cooperation and reform of global institutions, but the Iran war increasingly overshadowed proceedings as member states struggled to reconcile competing regional interests.

“The UAE is an active partner in this aggression, and there is no doubt about it,” Araghchi said while attending the BRICS gathering hosted by India.“It also became clear that they participated in these attacks and may have even acted directly against us,” he added, without publicly providing evidence to support the allegation.

The remarks underscored widening fractures within BRICS as the bloc attempts to project unity amid the war involving Iran and intensifying geopolitical instability across the Middle East.

Araghchi also referenced reports circulated by Israeli media concerning an alleged secret meeting between Israeli Prime Minister Benjamin Netanyahu and UAE President Mohammed bin Zayed Al Nahyan in the Emirates.Abu Dhabi has denied that any such meeting took place.

According to Iran’s Mehr news agency, Araghchi said he had initially avoided explicitly naming the UAE “for the sake of unity” during discussions among BRICS member states.“When the attacks started, they didn’t even issue a condemnation,” Araghchi said in response to remarks from the Emirati delegation.

The accusations come as BRICS foreign ministers meet to discuss the economic and geopolitical fallout from the Iran conflict, including disruptions to Gulf shipping lanes, energy markets and rising divisions among member countries.The UAE and Iran both joined BRICS during the bloc’s expansion phase in 2024, despite longstanding regional rivalries and competing strategic interests across the Gulf.

India, which currently chairs BRICS, is seeking to maintain consensus among members ahead of a leaders’ summit later this year, though disagreements over the Middle East conflict have complicated efforts to produce unified positions on global security issues.

India, which holds the BRICS presidency this year, is hosting the two-day meeting involving founding members Brazil, Russia, China and South Africa alongside newer entrants including Iran and the United Arab Emirates.

The summit comes as the war involving Iran and escalating instability around the Strait of Hormuz continue to disrupt shipping lanes and fuel markets, increasing pressure on energy-importing economies across Asia.

Indian foreign ministry spokesperson Randhir Jaiswal said the discussions would focus on “global and regional issues of mutual interest,” while diplomats indicated energy security, trade flows and geopolitical coordination would be central themes.

Iranian Foreign Minister Abbas Araghchi arrived in New Delhi late Wednesday, according to Iran’s embassy, while Russian Foreign Minister Sergey Lavrov held talks with Indian Foreign Minister Subrahmanyam Jaishankar shortly after arriving in the Indian capital.

Jaishankar said discussions with Lavrov covered “trade and investment, energy and connectivity” as well as broader multilateral issues, adding that political coordination among BRICS members had become increasingly important in a “volatile global environment.”The conflict in Iran has heightened concerns in India, which depends heavily on Middle Eastern crude oil and fertilizer imports.

Disruptions to Gulf shipping routes have contributed to volatility in oil and gas prices, complicating New Delhi’s economic outlook.Originally established in 2009 as a coalition of major emerging economies seeking greater influence in institutions traditionally dominated by Western powers, BRICS has expanded rapidly in recent years as member states sought to strengthen political and economic coordination across the Global South.

The bloc now includes Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia, though officials have not confirmed whether all member states are represented at the meeting.Despite efforts to project unity, internal divisions remain pronounced.

Differences over the Middle East conflict, relations with Western powers and regional rivalries have complicated attempts to present a unified diplomatic position.Indian officials declined to confirm whether the ministers would issue a joint communique at the end of the summit.

Prime Minister Narendra Modi is expected to meet participating foreign ministers ahead of a broader BRICS leaders’ summit scheduled later this year.

“The UAE is an active partner in this aggression, and there is no doubt about it,” Araghchi said while attending the BRICS gathering hosted by India.“It also became clear that they participated in these attacks and may have even acted directly against us,” he added, without publicly providing evidence to support the allegation.

The remarks underscored widening fractures within BRICS as the bloc attempts to project unity amid the war involving Iran and intensifying geopolitical instability across the Middle East.

Araghchi also referenced reports circulated by Israeli media concerning an alleged secret meeting between Israeli Prime Minister Benjamin Netanyahu and UAE President Mohammed bin Zayed Al Nahyan in the Emirates.

Abu Dhabi has denied that any such meeting took place.According to Iran’s Mehr news agency, Araghchi said he had initially avoided explicitly naming the UAE “for the sake of unity” during discussions among BRICS member states.

“When the attacks started, they didn’t even issue a condemnation,” Araghchi said in response to remarks from the Emirati delegation.The accusations come as BRICS foreign ministers meet to discuss the economic and geopolitical fallout from the Iran conflict, including disruptions to Gulf shipping lanes, energy markets and rising divisions among member countries.

The UAE and Iran both joined BRICS during the bloc’s expansion phase in 2024, despite longstanding regional rivalries and competing strategic interests across the Gulf.

India, which currently chairs BRICS, is seeking to maintain consensus among members ahead of a leaders’ summit later this year, though disagreements over the Middle East conflict have complicated efforts to produce unified positions on global security issues.

The two-day meeting comes as the expanded BRICS grouping, now comprising Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, faces growing diplomatic strain over the Gulf conflict and its economic fallout.

Iran has urged India, which holds the BRICS chairmanship for 2026, to use the forum to forge a consensus condemning military actions by the United States and Israel, according to officials familiar with preparations for the meeting.

The sharpest divisions have emerged between Iran and the United Arab Emirates, which are aligned on opposing sides of the conflict that erupted following military operations launched by the United States and Israel on Feb. 28.

Iranian Foreign Minister Abbas Araghchi is expected to arrive in New Delhi late on Wednesday for the talks, which run through May 15. Russian Foreign Minister Sergey Lavrov is also expected to attend, while it remained unclear who would represent the UAE delegation.

Indian Foreign Ministry spokesperson Randhir Jaiswal said earlier this year that forging consensus within BRICS had become difficult because several member states were directly involved in the conflict.

An Indian government official told Reuters New Delhi remained hopeful that discussions among ministers could still result in a joint communique despite continuing disagreements.

“Glad that the foreign ministers from all the BRICS countries, except China who is otherwise tied up, are coming,” former Indian diplomat Manjeev Singh Puri said. “This is a good sign on efforts to build a BRICS coalition around a matter of interest to emerging economies and the global south.”

China will instead be represented by its ambassador to India, Xu Feihong, as Foreign Minister Wang Yi is not expected to attend due to President Donald Trump’s visit to Beijing this week.

The war has intensified pressure on BRICS economies through rising energy costs and market volatility, prompting several member states, including India, to introduce emergency measures aimed at cushioning consumers and stabilizing domestic markets.

China has maintained a publicly neutral position throughout the conflict while balancing close ties with Iran alongside expanding economic and diplomatic relations with Sunni-majority Gulf states.

NDB, which has previously raised funds in Chinese yuan and South African rand, is in advanced stages of discussions with the Indian central bank for its debut rupee issuance, the sources said.

It will look to raise between $400 million and $500 million through 3-5 year bonds in the first tranche, one of the sources said.

The plan comes at a time when China and India are both pushing for greater international acceptance of their currencies and as investors are seeking to diversify their assets beyond developed markets.

Earlier this week, China rolled out measures to support the development of yuan bonds in Hong Kong and, over the past few months, the Indian central bank has announced steps to allow wider investment options for foreign funds held in Indian bank accounts.

Details of the bond issuance have not been previously reported. It could not be ascertained if NDB has appointed bankers to the issue.

A spokesperson for the Reserve Bank of India did not respond to a request for comment. The sources declined to be identified as they are not authorised to speak to the media.

“NDB is working with the government of India and regulators to explore raising funds in the local markets to provide local currency finance for Indian projects,” Monale Ratsoma, the bank’s Chief Financial Officer, said in response to Reuters queries. He declined to share details on the issuance.

Final approvals for the issue are pending with the Reserve Bank of India, two other sources familiar with the conversations said. It is not clear if all government approvals have been received.

An email sent to a government spokesperson was not immediately answered.

NDB had been planning to tap the Indian rupee bond market two years ago but two of the three sources said issuance was delayed as approvals from the government and central bank did not materialise then.

Five-year Strategy

Multilateral agencies such as the World Bank’s International Finance Corporation have previously issued rupee-denominated bonds in the overseas and local markets, drawing strong investor interest.

Established in 2015 by Brazil, Russia, India, China, and South Africa, the NDB has raised about a third of its $11 billion bond issues in local currencies, primarily the yuan and South African rand, with plans to expand into other member currencies.

NDB has targeted to provide 30% of its total financing commitments over the five-year strategy period in national currencies of member countries, the bank stated in its strategy report for 2022-26.

Issuing the bonds in the Indian market will add to the liquidity and diversity of the local bond market, said one of the sources quoted above. The onshore market has more depth and will help in better price discovery, this person added.

“The issue will draw interest from a segment of investors particularly those focused on emerging markets and interested in the de-dollarisation trend, said Vivek Rajpal, Asia strategist at investment advisory firm JB Drax Honore, adding that it can also be seen as a step in the direction of rupee internationalisation.

In televised comments to a virtual BRICS summit, Putin once again blamed the Middle East crisis on the failure of U.S. diplomacy in the region.

“We call for the joint efforts of the international community aimed at de-escalating the situation, a ceasefire and finding a political solution to the Palestinian-Israeli conflict. And the BRICS states and countries of the region could play a key role in this work,” Putin said.

He did not elaborate on how such an effort might be organised.

The BRICS group includes Brazil, Russia, India, China and South Africa. It agreed in August to expand by adding Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates as members.

Russian and Western policy experts say Putin is trying to use the Gaza crisis to his geopolitical advantage as part of a strategy to court allies in developing countries and build what he calls a new world order to counter U.S. dominance.

In previous comments he has repeatedly attacked U.S. policy, urged Israel to show restraint and has expressed sympathy for the plight of Palestinians.

Last month he cautioned Israel against laying siege to Gaza in the same way that Nazi Germany besieged Leningrad during World War Two, saying a ground offensive there would lead to an “absolutely unacceptable” number of civilian casualties.

On Tuesday he said it was “terrible” that Palestinian children were dying in large numbers, adding that the sight of operations being performed on children without anaesthetics “evokes special feelings”.

“Due to the sabotage of U.N. decisions, which clearly provide for the creation and peaceful coexistence of two independent and sovereign states – Israel and Palestine – more than one generation of Palestinians has been brought up in an atmosphere of injustice towards their people, and the Israelis cannot fully guarantee the security of their state,” Putin said.

Leaders of the BRICS – Brazil, Russia, India, China and South Africa – invited the two as well as Saudi Arabia, the United Arab Emirates (UAE), Ethiopia and Egypt into the club at a summit this week in Johannesburg.

The move is aimed at increasing the BRICS’ clout as a champion of “Global South” nations, many of which feel unfairly treated by international institutions dominated by the United States and other wealthy nations.

The additions are a mixed bunch: Saudi Arabia and the UAE are wealthy oil producers, inflation-wracked Argentina is desperate for foreign investment, Iran is isolated by Western sanctions, Ethiopia is recovering from a civil war and Egypt’s economy is in crisis.

Some investors and economic analysts are sceptical that expansion will lead to increased foreign direct investment (FDI) within the bloc.

“Egypt has already been expecting a lot of FDI from Saudi… and the Gulf money is not coming – and it is not because they are not in the BRICS organisation, it is because the proposition is not attractive,” said Viktor Szabo, a portfolio manager at abrdn in London.

Still, BRICS leaders and other investors touted the increased economic heft from the expansion. The new members would grow the bloc’s share of global GDP to 29% from 26% and trade in goods to 21% from 18%, Li Kexin, a senior Chinese foreign ministry official, told a press briefing on Thursday.

“I don’t know if I would say it’s a game changer, but in terms of opening up consumer markets there is scale there,” said Ola El-Shawarby, deputy portfolio manager for the Emerging Markets Equity Strategy at Van Eck in New York.

Increasing trade links between existing and prospective members of the bloc have garnered attention.

“The growing trade interconnectedness seems to be providing some fundamental ground for political announcements,” said Chris Turner, global head of markets at ING.

ING calculates that since 2015, the share of core BRICS in the new candidates’ imports increased from 23% to 30%, replacing the euro area, the United States, and other developed economies.Reuters Graphics

Other analysts and investors say Iran, which is under Western sanctions, as well as the bloc’s heavyweight member China – which has long-pushed for enlargement – are among the main beneficiaries of expansion.

“China and Brazil, India will benefit in terms of easy access to oil, and Argentina and notably Iran will benefit in terms of access to markets and FDI,” said Jakob Ekholdt Christensen, senior emerging markets fixed income strategist at BankInvest in Copenhagen.

“At most, the enlargement is a benefit for the new entrants that are hungry for capital,” said Hasnain Malik, a Dubai-based managing director at Tellimer, an emerging markets research firm.

“But this assumes they would not have seen capital inflow anyway from the richer BRICS countries and that any capital provided via a BRICS institution does not jeopardise that from other multi and bilateral sources.”

A BRICS loan to Argentina could conflict with the bailouts it has received from the International Monetary Fund, which has deeper pockets, said abrdn’s Szabo.

Increasing use of national currencies to reduce U.S. dollar dependence was another goal BRICS leaders discussed at the summit in Johannesburg. They said this could help lessen their economies’ vulnerability to a strong dollar and foreign exchange fluctuations.

And with oil producer heavyweights among the newcomers, investors said this would feed speculation that Saudi Arabia might increasingly switch to non-dollar-denominated currencies for oil trade.

“The short-term consequences could be seen in oil,” said Kaan Nazli, a portfolio manager at asset manager Neuberger Berman in London.

“If oil gets priced in a currency other than the dollar for example, or at least partly… that’s a big change.”

China’s growing influence in the Gulf has unnerved the United States – an issue that came into focus this week as Saudi Arabia and the UAE signed up to join Beijing in the BRICS group of states.

The prime minister, speaking at a lecture in Singapore, was responding to a question about how his country was managing its relationship with both global powers.

He dismissed another suggestion from the audience that growing Chinese defence sales to the Middle East could impact the region’s security ties with Washington.

“We welcome any cooperation with any of the countries, but none of our relations with any specific country will be at the expense of another,” he said, adding that his country had a strong defence alliance with Washington.

Modi and Xi agreed “to direct their relevant officials to intensify efforts at expeditious disengagement and de-escalation,” Foreign Secretary Vinay Kwatra said.

Relations between the two nuclear-armed neighbours have been sour for more than three years after soldiers from both sides clashed in the Himalayan frontier in June 2020, resulting in 24 deaths.

While the situation on the nearly 3,000-km (1,860-mile)frontier has been calm since, the face-off continues in a few pockets.

On the sidelines of the BRICS summit Modi highlighted to Xi “India’s concerns on the unresolved issues along the LAC”, Kwatra said.

Modi also “underlined that the maintenance of peace and tranquillity in the border areas, and observing and respecting the LAC are essential for the normalisation of the India-China relationship,” the foreign secretary said.

This is the first time that Modi has brought up the issue directly with Xi, repeating India’s stand that has been shared with China through other ministers multiple times.

The two leaders interacted on the sidelines of the Group of 20 nations summit in Indonesia last year, but only exchanged courtesies and discussed the need to stabilise ties, the Indian government said recently.

Discussions have taken place at several levels to find solutions to border issues, but a resolution remains elusive.

Xi told Modi that improving China-India relations served the interests of the two countries and was conducive to peace, stability, and development, according to China’s official Xinhua news agency, which said the meeting was at Modi’s request.

“The two sides should bear in mind the overall interests of their bilateral relations and handle properly the border issue so as to jointly safeguard peace and tranquillity in the border region,” Xi said.

Just before the two leaders travelled to Johannesburg, military commanders held talks for five days along the Himalayan frontier in an attempt to find a breakthrough. While the two sides said the talks had been positive, there was no word on any pullback of troops on the ground.

China’s foreign and defence ministers visited India earlier this year for G20 and Shanghai Cooperation Dialogue events and met their Indian counterparts.