Why in the News?

• India and Brazil signed multiple agreements, including a rare earth cooperation pact, during President Luiz Inácio Lula da Silva’s visit to New Delhi.

What’s in Today’s Article?

• India-Brazil Relationship (Background, Trade & Economic, Defence & Strategic, Energy & Climate)
• News Summary (Visit of Brazilian President to India, Key Agreements)

India-Brazil Bilateral Relationship

• India and Brazil share a long-standing partnership based on democratic values, South-South cooperation, and multilateral engagement.
• Diplomatic relations were established in 1948, and the relationship has evolved into a strategic partnership covering trade, defence, energy, and global governance.
• Both countries are key members of major multilateral groupings such as BRICS, G20, IBSA (India-Brazil-South Africa Dialogue Forum), and BASIC (climate negotiations grouping).
• They advocate reform of global institutions, including the United Nations Security Council (UNSC), and support a multipolar world order.

Trade and Economic Relations

• Brazil is India’s largest trading partner in Latin America. Bilateral trade has fluctuated between $12-15 billion in recent years.
  • India’s exports to Brazil: Organic Chemicals, Diesel oil, pharmaceuticals and chemicals, engineering goods including auto components and mechanical and electrical equipment, apparel and textile products, Iron and Steel (and products), Plastic, Ceramic, etc.
  • India’s imports from Brazil: Crude oil, soya oil, Gold, raw sugar, Asbestos, copper ores, iron ores, Manganese, Kidney beans, Cowpeas, valves, motor pumps, etc.

Defence and Strategic Cooperation

• India and Brazil cooperate in defence production, technology sharing, and maritime security.
• Both nations support peaceful dispute resolution and multilateralism. As large democracies of the Global South, they often coordinate positions at the UN, WTO, and G20.

Energy and Climate Cooperation

• Brazil is a global leader in renewable energy, particularly biofuels, while India has expanded solar and green energy initiatives.
• Both countries have cooperated in the Global Biofuels Alliance, announced in 2023. Renewable energy and clean technology remain central pillars of bilateral ties.

News Summary

• During President Lula’s visit, India and Brazil signed nine agreements covering critical minerals, steel mining, defence, and digital cooperation.
• Rare Earth and Critical Minerals Agreement
  • India signed a rare earth cooperation agreement with Brazil to secure access to critical minerals.
  • This agreement is strategically significant because China currently dominates global processing supply chains for rare earth elements.
  • Brazil possesses substantial rare earth reserves, of which only about 30% have been explored. The partnership could enable India to diversify supply sources for minerals essential to:

• Electronics manufacturing, Clean energy technologies, Electric vehicles, Defence systems

• The agreement strengthens supply chain resilience and reduces overdependence on a single country.
• The India-MERCOSUR Preferential Trade Agreement (PTA) forms the foundation of trade engagement. Both sides have agreed to expand this framework to unlock greater market access.

• Steel and Mining Cooperation
  • The two countries signed agreements on steel mining and mineral supply chains.
  • Brazil is one of the world’s largest iron ore producers, and enhanced cooperation could benefit India’s expanding infrastructure and manufacturing sectors.
• Digital Partnership for the Future
  • India and Brazil launched a joint declaration and action plan on a digital partnership. Cooperation is expected in emerging technologies such as:

• Artificial Intelligence, Semiconductors, Blockchain, Supercomputing

• This reflects India’s growing status as a digital technology hub and Brazil’s interest in leveraging digital transformation.

• Trade Expansion and Visa Facilitation
  • Both countries are committed to significantly increasing bilateral trade, with Brazil proposing a target of $30 billion annually by 2030.
  • Brazil also announced the extension of business visas for Indian ordinary passport holders to 10 years, facilitating long-term business collaboration.
• Response to Global Trade Uncertainty
  • The discussions occurred amid global trade disruptions following developments in U.S. tariff policies. Both leaders agreed to study the implications of recent tariff decisions and adopt a “wait and watch” approach.
  • This underscores the shared interest of India and Brazil in protecting trade autonomy and strengthening South-South economic cooperation.
• Strategic Significance

• Supply Chain Diversification: Reducing dependence on China for critical minerals.
• Strengthening the Global South: Coordinating positions in multilateral forums.
• Technological and Energy Transition: Promoting renewable energy and advanced digital technologies.