Brazil's Trade Proposal Aims to Boost Relations with India

13 Oct, 2023

Brazil's Trade Proposal Aims to Boost Relations with India

Brazil is actively working to strengthen its trade alliance with India, a strategic move that could significantly impact their economic partnership. The Brazilian government is spearheading an initiative to garner support from MERCOSUR countries, a collective of South American nations, in conducting a comprehensive feasibility study to assess the potential expansion of their existing trade agreement with India, which was originally established in 2004.

In the upcoming week, the Brazilian Ministry of Development, Industry, and Foreign Trade's Foreign Trade Secretariat is set to launch a public consultation. This consultation aims to gather recommendations from academia, civil society, and the private sector on expanding trade with India. During the 6th Meeting of the Bilateral Trade Monitoring Mechanism between the two countries held at the MDIC last week, representatives from both sides discussed the long-standing expansion of the India-MERCOSUR Trade Agreement.

Tatiana Prazeres, the Secretary of Foreign Trade at MDIC, emphasized the necessity of forging new partnerships to facilitate business expansion and create opportunities for Brazilian products to access emerging markets.

India, being a vast and rapidly growing economy, offers Brazilian companies ample opportunities to explore and expand their business endeavors. However, the trade relationship between MERCOSUR and India has remained limited, with a total trade volume of just US$23.2 billion in 2022, constituting a small fraction of MERCOSUR's global trade activities.

An examination of the trade dynamics between Brazil and India reveals untapped potential for growth. Over the past year, the trade volume amounted to US$15.2 billion. However, these figures account for only two percent of Brazil's exports and 3.3 percent of imports. Notably, a significant 80 percent of Brazil's exports to India are concentrated in three main products: soybean oil, petroleum, and other commodities.

Brazil's Secretary of Foreign Trade Prazeres, as reported, advocates for an ambitious goal of doubling bilateral trade in goods by 2030, along with an expansion of product offerings. Both Brazil and India are actively collaborating to elevate combined trade in goods and services to an impressive US$50 billion in the foreseeable future.