Just because people see all of these porno films and MMS clips suggesting women having sex with a young brother-in-law, or nephews having sex with auntie's, and all that stuff, remember, this is porno, not reality. I'm not saying it doesn't happen, because it happens all the time, but most porn is faked in one way or another. You might see a lot of porn to claims to be incest porn, but frequently, those involved are actors, pretending to be brother and sister, auntie and nephew, or whatever.
Your brother watches this stuff, and no doubt so you. Just because you say on your computer screen, doesn't mean to say that you have to copy. Elsewhere in this forum, I have today given advice to a couple about swinging. I will give you similar advice.
Think about the consequences of getting involved in such activities. Think about the harm it could do to your brother's marriage, think about the harm it could do to your relationship with your sister-in-law, think about what would happen if any of the rest of your family got to know what you were doing, and consider what the long-term consequences could be, particularly if your sister-in-law starts developing an attachment to you which surpasses that which she has with her husband stop and before you say that these things can't happen, they happen all the time. If you are a younger and more fit and attractive looking guy then your older brother, your sister-in-law might well look at you and think 'is maybe this is the one I should have married'
You haven't told us how you feel about this. He may be your older brother, but he does not own your soul, nor can he tell you what to do, particularly not in the circumstances. If your sister-in-law has given no indications of sexual interest in you, then in all likelihood, she would object to her husband's suggestions most strongly. As far as I'm concerned, he's showing her great dishonour in even considering such things.
On the other hand, if you are brother and his wife have been discussing this, and they are both enthusiastic about inviting you into the bedroom with them, you could go ahead, though I would still expect you to think long and hard before getting involved; but it sounds to me like she is the innocent party here, and he is attempting to manipulate both of you for his own sexual fantasies. In the first place, I would say nothing to your sister-in-law about this, but I would have some very strong words to say to your brother. Asking him why he shows such little respect for his wife, and tell him to behave himself.