India and Brazil set to sign key agreements to boost bilateral trade

India and Brazil, both wary of the tariffs that US President Donald Trump has threatened to impose, and looking beyond America for markets for their respective produce, are set to sign almost half a dozen agreements aimed at increasing their bilateral trade during Prime Minister Narendra Modi’s meeting with Brazilian President Luiz Inacio Lula da Silva. At the time of writing of this report, the meeting was ongoing.

 

India's trade with Brazil is the largest compared to its trade with any other country in Latin America. However, it is far below Brazil’s trade with China, the US, Argentina, and Germany. India-Brazil bilateral trade had reached $16.6 billion in 2022-23, and following the drop in oil and gas prices, it is now around $12.2 billion.

 

India enjoys a trade surplus as it exports goods worth $6.7 billion to Brazil and imports goods worth $5.4 billion. Modi and Lula set a bilateral trade target of $20 billion during their last meeting in November 2024. Brazil is looking to diversify exports to India beyond sugar and crude oil that dominate current sales. Earlier this year, Brazil’s Embraer SA, the world’s third-largest aircraft manufacturer, set up a subsidiary in India. Brazil is also looking at finding a market in India for its agricultural and dairy products.

 

At a recent event, Lula observed that he only recently discovered that Modi, a devout Hindu, didn’t eat meat. Brazil is the world’s topmost beef exporter. “Our trade relationship is just $12 billion, it’s nothing,” Lula said. “So please, arrange a box of cheese. I want it on the table, so he (Modi) never complains about Brazilian food and, who knows, maybe he’ll start buying Brazilian cheese,” Lula added.  ALSO READ: PhysicsWallah, YCMOU join hands to offer credit-based online degrees

 

Hours before he met the Indian PM in Brasilia for a bilateral meeting on Tuesday evening (India time), Lula joined his South African counterpart Cyril Ramaphosa in criticising Trump for his threat to slap extra tariffs against Brics member countries. On the final day of the two-day Brics Summit, which Brazil had hosted, Lula said the US President was “irresponsible for threatening tariffs on social media”. He also called on world leaders to find ways to reduce international trade’s reliance on the dollar.

 

Earlier, South African President Ramaphosa was the first among the Brics leaders to criticise Trump for his comments where the US President had warned Brics members of 10 per cent additional tariffs for adopting policies he said were “anti-American”.

 

In their Rio de Janeiro declaration, Brics members expressed “serious concerns” over tariffs, slammed soaring defence spending, and condemned airstrikes on Brics member Iran, but the group did not mention the US by name. The grouping also tasked its finance ministers and central bank governors to continue the discussion on the Brics Cross-Border Payments Initiative, and appreciated the progress made by the Brics Payment Task Force (BPTF) in identifying possible pathways to support the continuation of discussions on the potential for greater interoperability of Brics payment systems. The effort has been to reduce the dominance of the US dollar in international trade.

 

Brazil is also keen to increase its sesame exports to India, which have grown significantly since the Indian market opened to Brazil in 2020. It is also eyeing expanded ethanol exports. In Brasilia, the two countries are expected to ink deals on renewable energy, counter-terrorism, and cooperation on agricultural research, and agree on a framework to protect confidential information.

 

India is looking at increasing its cooperation with Brazil in oil & gas, mining and critical minerals, defence and security. The two leaders are expected to discuss ways to strengthen and diversify bilateral trade, including through expansion of the India-MERCOSUR Preferential Trade Agreement as Brazil is holding the chairship of MERCOSUR from July 1, 2025. MERCOSUR stands for Mercado Común del Sur, which translates to Southern Common Market. It's a South American regional trade bloc and economic integration initiative.