India, Brazil target US$15b trade by 2022

The President of India, Shri Ram Nath Kovind, received Jair Messias Bolsonaro, the President of Brazil, at Rashtrapati Bhavan on January 25, 2020. President Bolsonaro was on a four-day visit to India when he attended India’s 71st Republic Day celebrations. Welcoming the Brazilian President on his first state visit to India, President Kovind said that it was a singular honour to have him as the chief guest for the Republic Day celebrations. The opportunity marked a special occasion for the two nations that share a strategic partnership and saw both sides sign 15 separate agreements. President Kovind said that India attached the highest importance to its ties with Brazil, both in the bilateral and multilateral arenas. India and Brazil are partners on international platforms such as BRICS, BASIC, G-20, G-4, IBSA, ISA, apart from larger multilateral organisations like the UN, WTO, UNESCO, and WIPO. Brazil is also India’s largest bilateral partner in the Latin American and Caribbean region with trade valuation surpassing US$8.2 billion in 2018-19. The two nations are committed to raising the trade valuation to US$15 billion by 2022. 

President Bolsonaro’s visit provided the opportunity to boost the bilateral relationship, primarily in trade and investment. Presently, Indian firms are active in Brazil in the IT, automobiles and energy sectors, and the Government is keen to leverage defence and food processing expertise of Brazil to boost Make in India initiatives. India has invited Brazilian companies to partner in these sectors, apart from sectors such as renewable energy, biotechnology, and animal husbandry. Such opportunities were promoted at the inaugural session of the India-Brazil Business Forum held in New Delhi on January 27. On the occasion, India’s Commerce and Industry Minister, Piyush Goyal, hoped that investments will also grow in the sectors of clean energy, startups, railways as well as in the creation of value chains between India and Brazil where goods may be semi-assembled in one country and finished in another. Minister Goyal urged that the India – Brazil Business Leaders’ Forum may be activated and reconstituted to make it more relevant and contemporary to businesses in both countries. This will help create future opportunities.

The cooperation agreements signed during the presidential visit on investments, trade facilitation, social security, agriculture, defence, and double taxation made this the most productive visit by a Brazilian Head of State. These included: 

Additionally, the two nations also announced an agreement to facilitate visa-free travel between them. The move is expected to encourage business and tourism activities between the two countries. President Bolsonaro’s visit came months after Prime Minister Shri Narendra Modi attended the 11th annual summit of the BRICS bloc of nations (Brazil, Russia, India, China, and South Africa) in Brasilia in November 2019. The summit themed around “Economic Growth for an Innovative Future,” marked PM Modi’s sixth appearance at the key meeting of the heads of the world’s most prominent emerging economies. The BRICS bloc represents 50 per cent of the world’s population, 25 per cent of the global GDP and around 20 per cent of the total world trade in 2018. On the sidelines of the summit, PM Modi had held a bilateral meeting with President Jair Messias Bolsonaro that built the ground for greater cooperation in an expanded range of areas. As India embarks on its journey to set up a US$5 trillion economy by 2024, the nations will need the participation of its global partners. Herein, Brazil can be of particular help.

Previously, PM Modi and President Michel Temer had met at the VIII BRICS Summit in October 2016 in Goa, India. At the time, both leaders had held delegation-level deliberations to further strengthen the strategic partnership. Building on the strengthening ties, in recent times, the two nations have discussed cooperation in UNSC reforms, IBSA, bilateral trade, agriculture, food processing, energy, science and technology, pharmaceuticals, space, nuclear energy, climate change, counterterrorism, as well as cybersecurity. The two nations have several bilateral agreements and commissions in place, spanning the sectors of science and technology to maritime and defence that have boosted cooperation, driving new possibilities. As a result, in 2018, India was the 11th biggest exporter to Brazil and the 10th biggest importer from Brazil. Meanwhile, total Indian investment in Brazil was estimated at US$8 billion. This is expected to grow in the future as the scope of engagement expands rapidly.