Brazil- India: The Road Ahead

As Brazil and India celebrate 70 years of friendship, there are many things to be cherished and remembered – the cooperation and convergence of position on a range of issues from international security to climate change, the growing bilateral trade between the two countries among others. In this article, Tovar da Silva Nunes, Ambassador of Brazil, feels that given the understanding between the countries, they can expand their cooperation in the field of agriculture, which can be highly beneficial to both the countries.

In 2018, Brazil and India will celebrate 70 years of friendship and diplomatic ties. As soon as India became an independent country, Brazil immediately took the necessary steps to open an Embassy in New Delhi in 1948, being the first Latin American country to do so. India reciprocated and opened an Embassy in Rio de Janeiro the same year, subsequently transferred to Brasilia in 1971. Beyond its anecdotal character, the story of how and when Brazil and India opened Embassies in each other is in hindsight a clear indication of what was to come. Today, Brazil and India cooperate actively in international fora in areas that range from international security to climate change and science. Brazilian and Indian officials discuss and coordinate positions in areas related to global governance and international trade and finance architecture.

Bilateral trade has been growing and amounted to US$ 7.9 billion in 2015. Investment is also booming, as Indian firms, having discovered the opportunities offered by the current privatization program sponsored by the Brazilian government, are actively participating in bids in areas like energy transmission and mining.

Despite these good signs, there is an undeniable feeling among government officials and businessmen that the two countries can do more and better in a number of areas, first and foremost among them in agriculture. India is among the biggest food producers and food importers in the world. Brazil is the 4th top exporter worldwide. However, many of the agricultural products that India buys and which could be imported from Brazil are actually provided by third countries.

The average tariff paid by Brazilian agricultural products to enter the Indian market is 34% ad valorem. However, for products like sugar and corn the tariff peaks at 50% and 60%, respectively, even if these rank among the products imported by India regularly. For wheat – a product whose exports from Brazil have been rising in the last few years – the tariff is 100%. Among the products most imported by India are wood and wood products, pulses and fruit, but these rarely come from Brazil.

Brazil and India are working hard to overcome these difficulties. A number of areas have become the topic of new initiatives aimed at transforming bilateral trade. Brazilian authorities are examining Indian requests to export onions, grapes, rice, corn, soya beans and castor oil. Similarly, India is examining requests for pork and has recently allowed Brazilian apples to be sold in the Indian market.

Another remarkable initiative is the strategic expansion of the Preferential Trade Agreement between Mercosur – the third largest integrated market after the European Union and the NAFTA – and India. The current agreement became effective in 2009 and covers merely 450 products (meat and meat products, chemicals and pigments, raw hides and skins, leather articles, wool, cotton yard, some electrical equipment, among others). It was the first preferential agreement signed by Mercosur outside its region. High officials from Mercosur and India agree that the current agreement needs to be expanded in order to make justice to the full trade potential of their members and initiated discussions on its expansion soon after it became effective.

As Mercosur countries and India engage in the exercise of exchanging offers to expand the scope of the agreement, it is important to keep a level of ambition that adequately reflects the perspectives of growth in trade. Failing to do so would frustrate the best intentions of Government officials and negotiators, not to mention to fall short of the immense potential yet to be fully realized in bilateral trade.

Finally, a very positive step was taken last year during the BRICS summit in Goa (March 2016), when agricultural authorities signed a memorandum of understanding (MoU) that will allow them to cooperate in the management of genetic resources for zebu and other indigenous races of cattle from India. The memorandum is expected to facilitate research on new genetic varieties and the improvement of those already existing, with great benefit to farmers and businessmen from both countries.

As Brazil and India prepare to celebrate 70 successful years of friendship, both countries strive to make their status in international trade, finance and security institutions commensurate with the role they rightfully play in world affairs. Bilaterally the road is open to deepen the ties that have united both countries over seven decades and will make them stronger partners in the years to come.

(Views expressed are personal.)