Although bilateral trade between India and Brazil has increased over the years, it is highly lopsided, a senior

government official said here Friday.Indian businessmen have been frequently exploring trade domain of Brazil, while their Brazilian counterparts have remained with their traditional partners and have been less active in discovering newer ventures, said Hardeep Puri, Secretary, Economic Relations, Ministry of External Affairs. Puri was speaking at an interactive session with a business delegation from North-East Brazil, organised by the Confederation of Indian Industry (CII). Added Eduardo Capos, Governor of Brazils Pernambuco state: BRIC economies need to stand together to help the world overcome the present economic challenge. In the year 2002, trade between BRIC countries was worth $7 billion, which has risen to $50 billion today.
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Bilateral Trade relations of India and Brazil The India's Union Minister of Commerce and Industry, Mr. Kamal Nath has reiterated the importance of trading relations with Brazil during his bilateral meeting with the Brazilian Minister for Development Industry and Foreign Trade, Mr. Miguel Jorge. He states down the realization of India towards the imperative role of Latin America and Caribbean and for this the Indian government has started out a special programme, FOCUS LAC for promoting the trading relations between India, Latin America and Caribbean."Brazil being the largest trading partner in Latin America has special importance for India. Over the years, Brazil has emerged out as our biggest partner in the LAC region with our bilateral trade crossing 3 billion marks in 2007. Bilateral trade has jumped to US$ 3.12 billion in 2007 from merely US$ 488 million in 2000. However, I feel that considering the huge opportunities of mutual interests, the volume of trade is still low and it could be enhanced manifolds by efforts of governments and trade bodies of our two countries. In the recent India-Brazil Joint Commission Meeting in April 2007, both the governments have set a target of US$ 10 billion by 2010 and we are working towards achieving this target" further added by the ministry. In view of the investments, Mr. Nath has asserted added that the "Our mutual investments have also increased in recent years, particularly in the field of information technology, biotechnology and pharmaceuticals. The Indian pharmaceutical companies have made a success story with their entry in Brazil. Almost all the major pharma players of India have established their presence in Brazil with supply of bulk drugs, finished formulations and establishment of manufacturing units and joint ventures. Areas of mutual interests between our countries cover pharma, aviation, engineering products, agriculture based industries including equipments and food processing industries, energy including ethanol, chemical products, auto parts and vehicles and two wheelers, IT, banking and urban infrastructure. South-South cooperation is an integral part of our bilateral relationship. India and Brazil have demonstrated their determination in reformulating the big questions that affect foreign policy and trade at the international level. India and Brazil must continue to be close partners in the UN, WTO and other international foray on issues such as social development, health care, sustainable economic development and poverty alleviation."

From the past few years, Brazil has emerged out as the biggest partner of India in the Latin American region. Merely from US$ 488 million, bilateral trade between Brazil and India have witnessed the quantum increase and has crossed the mark of 3 million in 2007. Both the governments have set out the target of achieving US$0 billion mark in next 2 years i.e, 2010 and have already started working in achieving the set standards. On the context of the MERCOSUR, which is the regional trade agreement between Argentina, Brazil, Paraguay and Uruguay, the commerce union minister has said that the "India and MERCOSUR have agreed to give tariff concessions, ranging from 10% to 100% to the other side on 450 and 452 tariff lines respectively. The PTA will come into force as soon as ratified by the legislatures of Brazil and Argentina. Meanwhile the process of expansion of the coverage of the PTA has also been initiated in persuasion of the IBSA Declaration made by the Heads of India, Brazil and South Africa on September 13th 2006.". Shri Kamal Nath expressed the hope that "thehe operationalization of PTA will help achieving the target of 10 billion two-way trade in years to come". In recent years more and more investments have been directed from the India to the Brazil, especially in the areas of information technology, biotechnology and pharmaceuticals. Many Indian companies like Tata Consultancy Services, Ranbaxy and Dr. Reddy's Laboratories etc, are striding towards making a mark in the Brazilian marketplace. TATA is also paving its footprints for exploring new avenues in the Brazil
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India and Brazil need to create a world market by supporting each other, and need the private sector to cooperate in this effort, said the President of the Republic of Brazil, Mr Luiz Inacio Lula da Silva. "India-Brazil bilateral trade relation has the potential to achieve the target of $10 billion by 2010 and can also go beyond the target," said Mr Lula da Silva at a meeting organised jointly by industry chambers CII, Assocham and FICCI. He said Brazil was running a programme with a focus on development of infrastructure, and Indian entrepreneurs could directly invest in the infrastructure sector. India and Brazil have not even identified 10 per cent of the bilateral trade opportunities and there is a lot of potential in the exchange of technology and engineering capabilities. Brazil can contribute to India's agricultural sector whereas India can provide pharmaceutical technology to Brazil, he said. Earlier in the day, the Prime Minister, Dr Manmohan Singh, and Mr Lula da Silva, formed the CEO's forum to include business communities of both the countries to achieve a trade level of $10 billion by 2010.
Preferential trade pact

Referring to the partnership between India and Mercosur, of which Brazil is a part, Mr Kamal Nath, Minister of Commerce and Industry, said: "India and Mercosur have agreed to give tariff concessions, ranging from 10 per cent to 100 per cent, to the other side on 450 and 452 tariff lines respectively. The Preferential Trade Agreement (PTA) will come into force as soon as it is ratified by the legislatures of Brazil and Argentina." In the meanwhile, said Mr Nath, the process of expansion of the coverage of the PTA has also been initiated. "I hope the operationalisation of the PTA will help achieving the target of $10 billion two-way trade in years to come," he said. A trilateral arrangement among India, Mercosur and South Africa Customs Union is also on the way to widen the scope of South-South cooperation, Mr Nath added.
Opportunities

Mr Miguel Joao Jorge Filho, Minister for Development Industry and Foreign Trade, Brazil, said that Brazil and India have a huge business opportunity in pharmaceuticals, bio-fuels, IT, food processing, automobile parts, mining, civil aviation, medical equipment, infrastructure and railway equipment. Mr Anand Sharma, Minister of Sate for External Affairs, said that India and Brazil share a strong bilateral trade relationship and have a global dimension. The CEO forum have accepted the challenge of growth set by the leaders of Brazil and India where both the countries should play their rightful role in the developing countries, he added.
Relations between Brazil and India seem to be blooming recently, favoured by a mix of domestic and international developments. Together with an expanded terrain of common interests in multilateral political and economic matters, both countries share the trend of perceiving bilateralism as a stimulating and useful learning process. Furthermore, they have assumed a leading role in the process of revival of South-South diplomacy in world affairs. Brazil and India have become major actors in recent proposals aimed at simultaneously promoting a renewed configuration of multilateral institutions and innovative inter-state coalition building among developing countries. The India, Brazil, South Africa (IBSA) initiative is part of this strategy. However, time and maturity are still needed to assert that BrazilIndia bilateral ties and converging interests will build up as a relevant dimension for each other's international insertion as well as for an effective renewal of SouthSouth relations in the twenty-first century.

The major exportable items constitute coffee, soybeans and manufacturing goods. The major importable items are fuel, energy and capital goods. A surplus is being marked in the merchandise trade of the Brazilian Economy over the years.

BILATERAL TRADE FIGURES

All Figures in US$ million

2006
Brazilian imports from India Brazilian exports to India Total Trade Trade Balance

2007 2,165 958 3,123 -1,207

1,474 939 2,413 -535

TOP TEN INDIAN EXPORTS TO BRAZIL(US$ FOB) HS Code

27 29 30 84 54 72 39

ITEM

2007

2006

(variation)%

1.091.690.930 Mineral Fuels, mineral oils and products of their distillation 304.919.077 Organic Chemicals 107.893.985 Pharmaceutical Products 94.582.613 Nuclear reactors, boilers, machinery and mechanical appliances 81.918.651 Man-made Filaments 32.491.774 Iron and Steel 47.200.181 Plastics and articles thereof

757.687.925 229.931.461 80.905.830 45.842.816 44.506.023 35.982.947 35.386.659

44,1 32,6 33,4 106,3 84,1 -9,7 33,4

55 Man-made staple fibres 85 Electrical Machinery and Equipment and parts thereof 32 Tanning or Dyeing Extracts; Tannins and their colouring matters Others

TOTAL-ALL PRODUCTS

65.467.679 61.873.060 34.537.600 242.352.519 2.164.928.069

28.388.980 27.203.698 24.959.895 163.142.266 1.473.938.500

130,6 127,4 38,4 46,9

Source: Secretariat of External Commerce (SECEX), Ministry of Development, Industry & External Commerce, Brazil Note: Comparison based on the main products in 2006 Prepared by the Indian Embassy in Brazil/ Commercial Section

TOP TEN INDIAN IMPORTS FROM BRAZIL (US$ FOB) ITEM

Mineral Fuels, mineral oils and products of their distillation Ores, Slag and Ash Animal of vegetable fats and oils and their cleavage products Iron and Steel Aircraft, spacecraft, and parts thereof Nuclear reactors, boilers, machinery and mechanical appliances Organic Chemicals Electrical Machinery and Equipment and parts thereof Rubber and articles thereof Raw Hides and Skins (other than furskins) Others TOTAL-ALL PRODUCTS 2007 2006 (variation) %

HS Code
27 26 15 72 88 84 29 85 40 41

533.416 288.825.317 184.798.100 99.698.789 93.914.229 62.351.334 34.509.763 10.824.500 15.145.924 167.253.077 957.854.449

200.220.259 146.403.231 107.783.696 86.680.666 82.925.193 79.787.655 45.629.564 30.578.649 22.986.445 17.047.972 116.542.252 936.585.582,00

-99,7 97,3 71,5 15,0 -17,7 36,6 12,9 -52,9 -11,2 2,3

Source: Secretariat of External Commerce (SECEX), Ministry of Development, Industry & External Commerce, Brazil Note: Comparison based on the main products in 2006 Prepared by the Indian Embassy in Brazil/ Commercial Section

Indias links with Brazil go back five centuries. Portugals Pedro Alvares Cabral is officially recognised as the first European to discover Brazil in 1500. Cabral was sent to India by the King of Portugal soon after the return of Vasco de Gama from his pioneering journey. Cabral is reported to have been blown-off course on his way to India. Brazil became an important Portuguese colony and stop-over in the long journey to Goa. This Portuguese connection led to the exchange of several agricultural crops between India and Brazil in the colonial days. Indian cattle was also imported to Brazil. Most of the cattle in Brazil is of Indian origin. Diplomatic relations between India and Brazil were established in 1948. The Indian Embassy opened in Rio de Janeiro on May 3, 1948. It shifted to Brasilia on August 1, 1971 (Brazils capital had moved to Brasilia in 1960).

Brazil and India are large continental sized countries with social diversity, democratic form of government, a multi-ethnic population, and a large population base. Both possess advanced technologies. The two countries share similar perceptions on issues of interest to developing countries and have cooperated in the multilateral fora on issues such as international trade and development, environment, reform of the UN and the UNSC expansion. There is enormous interest in Brazil in India's culture, religion, performing arts and philosophy. A number of cultural events including performances by famous Kuchipudi dance group, "Raja and Radha Reddy" were organized in the major cities of Brazil ahead of the Prime Minister Dr. Manmohan Singh's visit to Brasilia from 11-14 September, 2006. Earlier, a very successful Festival of India was organised during the visit of President K.R. Narayanan to Brazil in May 1998. There are numerous organisations teaching yoga and they invite yoga teachers from India for instructions and learning. ISKCON, Satya Sai Baba, Maharshi Mahesh Yogi, Bhakti Vedanta Foundation and other Indian spiritual gurus and organisations have their chapters in Brazil. The University of Londrina has a good specialization on India in its AfroAsian studies department. Mahatma Gandhi is highly regarded in the country and the government has sought to teach his philosophy of non-violence to the police to improve its track record. A statue of Mahatma Gandhi is located in a prominent square in Rio de Janeiro. A group called the Filhos de Gandhi (Sons of Gandhi) participates regularly in the carnival in Salvador. Private Brazilian organizations occasionally invite Indian cultural troupes. In recent years, relations between Brazil and India have grown considerably and co-operation between the two countries has been extended to such diverse areas as science & technology, pharmaceuticals and space. The two-way trade in 2005 nearly doubled to US$ 2.34 billion from US$ 1,207 billion in 2004. India attaches tremendous importance to its relationship with this Latin American giant and hopes to see the areas of co-operation expand in the coming years.