India-Brazil relations can become even stronger across spheres
Leonardo Ananda Gomes, President, India-Brazil Chamber of Commerce, emphasized that Brazil and India can become key partners for a deeper and long-term relationship, especially considering the still underexplored opportunities. He adds that post-COVID, there is necessity to reinvent, adapt and find new forms of cooperation in sectors like agribusiness and renewable energy.
Since 1948, after India’s Independence, India and Brazil have been developing their bilateral relationship as two independent countries and big players in the respective regional scenarios. These relations have been growing stronger ever since. However, it seems they can become even more relevant in the near future.
From 2004 to 2014, commercial trade between the two countries increased and diversified significantly. After the peak in 2014, trade between the two countries has been admittedly at lower levels, also as a result of international and national crises. However, the strong recent interactions at the governmental and institutional levels, leads to an expectation of growth in commercial trade of up to US$ 15 billion in 2022, according to H.E. Ambassador of Brazil in India, Mr. André Corrêa do Lago.
Taking a closer look at some of the latest interactions between the two countries, bilateral relations have gained relevance, with both governments showing political interest in coming closer together. This became evident after the invitation of the Indian Prime Minister, Mr. Narendra Modi, to have Brazil as a guest country in the celebration of the Independence of India in January 2020. This visit of the Brazilian Federal Government to India led to the signing of 15 agreements1, in many different sectors, to facilitate business engagement and cooperation between the two countries. The agreements go from technological and scientific cooperation to childcare and cultural exchange matters.
Nowadays, facing the Covid-19 pandemic, the importance of the Indo-Brazilian bilateral relations has been highlighted, especially in the pharmaceutical sector. According to data from the Ministry of Economy of Brazil for 2020, pharmaceutical products correspond to almost 30% of India’s exports to Brazil. Furthermore, some of the largest investments by Indian companies in Brazil are in this sector: ACG, Zydus, Lupin and Dr. Reddy’s, just to mention a few.
Moreover, when talking about the India-Brazil Relations, another sector that deserves great attention is information technology (IT). India is recognized around the globe for its strong technology market, as the birthplace of relevant companies in the sector. It is an international reference for software development and programming, being a world leader in the sale of outsourcing services and retaining an average of 75% of global talents in the digital age, according to the India Brand Equity Foundation.
On the other hand, Brazil is not in the spotlight for IT services and has a lot to improve in its national industry and supply capacity. Considering high demand and untapped potential in the Brazilian market, companies like Tata Consultancy Services, Infosys, Wipro, HCL Technologies, Tech Mahindra and others set up their operations in the country, turning IT into one of the most relevant sectors for bilateral relations.
Moreover, even though Brazil is not a key player in the international scenario for IT, the vision of a creative economy is stimulating the development of several start-ups in many sectors, willing to fill market gaps with innovative products. According to the Global Innovation Index 2019, Brazil is the 10th biggest developer of mobile apps and appears in the top 10 of metrics for quality of innovation. This implies that besides the lower quantity of internationally recognized companies and overall products/services offered in the technology sector, Brazil has a potential for quality creation.
In that sense, besides the market complementarity, Brazil and India show great potential for technology cooperation, especially in areas that have international scope and in which India is already ahead in its development, while Brazil has a lot to explore vis-a-vis its creativity and market capacity. Some such segments, which can be interesting for cooperation in the scope of the bilateral relations are artificial intelligence, cybersecurity and safety technologies.
Undoubtedly, IT & pharmaceutical sectors play protagonist roles when talking about business between Brazil and India. Also, if we look at2 the commercial trade balance of products exchanged between the two countries, we notice the crucial role of the oil and gas sector, including crude materials and fuel oils. Around 48% of Brazilian exports to India, in 2020, were represented by crude petroleum oil and 20% of Brazilian imports from India were represented by petroleum fuels, in the same year.
However, there are other areas that must be considered for deeper cooperation, since COVID-19 is leaving an important lesson in what concerns the necessity to reinvent, adapt and find new forms of cooperation in sectors like agribusiness and renewable energy, for example.
Brazil is internationally recognized for its contribution to agribusiness, as the country is the largest producer and exporter of products like soybean, corn, sugar, meat and others that are part of basic consumption globally. It is also favoured with large stretches of land and hydric resources that can be also used to grow pulses that are largely consumed in India.
In this panorama, it is pertinent to mention that India, although being a large producer of pulses, has a huge internal demand that necessitates imports. Recent data shows that India isn’t still included in the top 10 destinations for Brazilian pulses exports. Therefore, it is clear that there is wide potential for growth of bilateral relations in the agricultural sector, specifically in the pulses segment.
At last, let’s bring to the discussion the renewable energy topic that has become a trend worldwide. According to IBEF, India is the fourth most attractive market for this sector. On the other hand, Brazil has been using ethanol for 40 years as a source of renewable energy and is willing and open to sharing its experiences with India, as the country has already shown interest. Therefore, technological cooperation in order to produce ethanol, relying on the vast Brazilian experience, in addition to increasing Indian production of this biofuel, will also help to balance the world sugar supply and provide greater price stability for this commodity, said Brazilian Minister Tereza Cristina.
Conclusion
Bilateral relations between India and Brazil celebrated 70 years in 2018, a very significant mark and the result of efforts and mutual interest from both sides in coming closer together. However, it is clear that these relations can still become stronger, in many spheres, bringing benefits for both countries. Brazil and India are both relevant regional and international players and even though they have outstanding cultural differences, the similarities between those countries can also be seen, especially when looking into social problems faced by both, the need for economic development, the shared democratic values and the usually common alignment in the global scenario.
Nowadays, in this context of “new normality”, even though there is an intensification in protectionist and international transit restrictions, the importance of international cooperation, with strategic partners, has been highlighted. Brazil and India can become key partners for a deeper and long-term relationship, especially considering the still underexplored opportunities in this interaction. Therefore, it seems there is a tendency for India and Brazil to explore further the synergies between them and make this alliance even stronger for mutual growth.
The authors of the article are Mr. Leonardo Ananda, Ms. Giovanna Menezes, Ms. Letícia Gomes & Ms. Nathalia Rodrigues. Views expressed are personal.
Sources:
- ComexVis:
http://comexstat.mdic.gov.br/pt/comex-vis - Ministry of Economy of Brazil:
http://comexstat.mdic.gov.br/en/geral - Ministry of External Affairs of India:
https://www.mea.gov.in/bilateral-documents.htm?dtl/32325/List+of+MoUsAgreements+exchanged+during+State+Visit+of+President+of+Brazil+to+India - Ministry of Commerce & Industry of India:
https://commerce.gov.in/InnerContent.aspx?Id=506 - Interfarma São Paulo , 2015:
https://www.interfarma.org.br/public/files/biblioteca/70-balanaa-comercial-site.pdf - ANVISA:
http://portal.anvisa.gov.br/noticias?p_p_id=101_INSTANCE_FXrpx9qY7FbU&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column-2&p_p_col_count=1&p_r_p_564233524_t
ag=fila+de+an%C3%A1lise - Trading Economic:
https://tradingeconomics.com/brazil/exports-to-india - Times of India:
https://timesofindia.indiatimes.com/tv/news/hindi/six-interesting-facts-about-zindagis-total-dreamer/photostory/58609829.cms?picid=58609867 - IBEF:
https://www.ibef.org/industry/renewable-energy/showcase
https://www.ibef.org/industry/indian-iT-and-iTeS-industry-analysis-presentation - Época Negócios – Globo:
https://epocanegocios.globo.com/Empresa/noticia/2019/10/o-brasil-sera-o-primeiro-pais-com-energia-100-renovavel-do-mundo.html#:~:text=O%20Brasil%20%C3%A9%20uma%20pot%C3%AAnc
ia,usar%20100%25%20de%20energia%20renov%C3%A1vel. - Global Innovation Index 2019:
https://www.globalinnovationindex.org/gii-2019-report#
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