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India and Brazil set to sign key agreements to boost bilateral trade
India's trade with Brazil is the largest compared to its trade with any other country in Latin America. However, it remains far below Brazil's trade with China, the US, Argentina, and Germany. India-Brazil bilateral trade reached $16.6 billion in 2022-23, but following the drop in oil and gas prices, it is now around $12.2 billion.
India enjoys a trade surplus, exporting goods worth $6.7 billion to Brazil and importing goods worth $5.4 billion. Modi and Lula had set a bilateral trade target of $20 billion during their last meeting in November 2024. Brazil is looking to diversify its exports to India beyond sugar and crude oil, which currently dominate sales. Earlier this year, Brazil's Embraer SA, the world's third-largest aircraft manufacturer, set up a subsidiary in India. Brazil is also seeking to expand its market for agricultural and dairy products in India.
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 top 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 never complains about Brazilian food and, who knows, maybe he'll start buying Brazilian cheese.'
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 impose extra tariffs on 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 percent additional tariffs for adopting policies he claimed were 'anti-American.'
In their Rio de Janeiro declaration, BRICS members expressed 'serious concerns' over tariffs, condemned soaring defence spending, and denounced airstrikes on BRICS member Iran. However, the group did not mention the US by name. The grouping also tasked its finance ministers and central bank governors to continue discussions 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 greater interoperability of BRICS payment systems. The effort is aimed at reducing 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 sign deals on renewable energy, counterterrorism, cooperation in agricultural research, and agree on a framework to protect confidential information.
India is looking to increase its cooperation with Brazil in oil and gas, mining and critical minerals, defence, and security. The two leaders are expected to discuss ways to strengthen and diversify bilateral trade, including through the expansion of the India-MERCOSUR Preferential Trade Agreement, as Brazil assumes the chairship of MERCOSUR from July 1, 2025.
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