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Indo-Brazil Bilateral Relations – All India Radio (AIR) IAS UPSC

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  • March 5, 2020
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Indo-Brazil Bilateral Relations

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Search 24th January 2020 Current Affairs here: http://www.newsonair.com/Main_Audio_Bulletins_Search.aspx 

Topic: General Studies 2

  • India’s relationship with other countries – Brazil

India and Brazil share close and multifaceted relationship at bilateral level as well as in plurilateral fora such as BRICS, BASIC, G-20, G-4, IBSA, International Solar Alliance, Bio-future Platform and in the larger multilateral bodies such as the UN, WTO, UNESCO and WIPO.

India and Brazil

  • Combined GDP is of around USD 4.5 trillion
  • Have a total population of 1.5 billion
  • The volume of bilateral trade in 2018-10 was USD 8.2 billion which included USD 3.8 billion worth of Indian exports to Brazil and USD 4.4 million as imports by India.

BUT total trade stands at an underwhelming $7 billion, barely up from 2004 when for the last time a Brazilian head of state attended Republic Day, standing at $1.5 billion. Meanwhile, Brazil’s trade with China has ballooned from $4 billion to over $100 billion in the same period. And India’s trade with China hovers at around $90 billion.

India and Brazil signed 15 agreements to cement cooperation in areas ranging from energy and trade and investment to cyber security and information technology

The action plan unveiled by the two countries included the setting up of consultation forums and frameworks like foreign office consultations, strategic, economic and financial dialogues, a trade monitoring mechanism and joint working groups in the area of oil and gas, bio-energy, geology and mineral resources, science and technology, environment and global cyber issues.

Trade & Commerce: India and Brazil drew up an ambitious plan to boost their stuttering economies by significantly expanding cooperation in key sectors like oil, gas and mining, while setting a target of USD 15 billion in bilateral trade by 2022.

  • Inked an investment cooperation and facilitation treaty providing for a framework to increase trade and investment in high growth areas
  • On Brazil approaching the WTO against India for extending support to sugarcane growers – bilateral consultations will be made
  • Has invited Brazilian industry to explore business opportunities in India in infrastructure, food processing, bio-fuels and other renewable energy sources, animal husbandry and agro sectors.
  • President Bolsonaro also called upon Indian industry to identify business opportunities, including in Brazil’s automotive, leather, oil and gas, including oil refining, and pharmaceutical sectors.

Energy Partnership

  • A separate pact was inked for cooperation in the field of oil and natural gas while another one was sealed in the bio-energy sector.
  • Agreed that there was a great potential for increased ethanol production and uptake in India’s fuel mix and looked forward to further collaboration in the area – Brazil could also export ethanol to India in the interim to quicken its 10 per cent ethanol-blend programme. In exchange, Brazil is poised to help Indian farmers implement a more efficient ethanol programme that reduces reliance on subsidies and helps improve urban India’s air quality.
  • Indian oil and gas sector offers investment opportunities to Brazilian companies in exploration and licensing of upcoming fields, operationalization of already discovered fields and related projects
  • Apart from oil and gas, the other areas identified for expansion of cooperation included agriculture, bio-fuels, animal husbandry, health and science and technology.

Animal Husbandry: 

  • Recognized the common genetic heritage in cattle in India and Brazil and agreed to collaborate in assisted reproductive technology that is expected to help increase dairy production in India.
  • Welcomed the decision to set up a Centre of Excellence in Cattle Genomics in India with Brazilian assistance

Mining sector: The two sides agreed that mining activities and investments offered a significant potential for enhancing bilateral cooperation in this sector.

Social Security Agreement: India and Brazil signed a social security agreement and hailed it as an important step to facilitate movement of professionals and business persons between India and Brazil.

The Way Forward:

Rich in human resources, both economies are driven by expanding middle classes clamouring for improved public services. Consumers in both are value-conscious, demanding durability and affordability.

  • Agribusiness is the most immediate and obvious opportunity. Complementary growing seasons and sizeable internal markets make the two countries ideally suited for partnerships in agriculture.
  • Each could benefit from a cross-fertilization of investment in solar power.
  • Brazil is turning its back on protectionism and forging new trade alliances. This shift, with India’s withdrawal from Asia’s Regional Comprehensive Economic Partnership, opens a pathway for a new India-Brazil trade framework. Preferential treatment for each country’s goods would benefit the large multinationals in São Paulo and Mumbai, as well as small and medium-sized firms in Belo Horizonte and Curitiba, Hyderabad and Chandigarh. Many of these small and medium-sized firms are providing innovative solutions to meet the demands of the middle classes in both countries. These firms are reshaping access to financial products and services through digital payments, microinsurance and online banking, to the benefit of entrepreneurs and small business owners.

The time is right for deepening this relationship. This arrangement will not just facilitate the flow of investments, but also strengthen and fortify India’s strategic interests. Moving in this direction will be a practical litmus test for the ease of doing business. It will send out positive signals to foreign investors. A bilateral agreement between the two countries will secure this, which, in turn, will globally push India up in the ‘World Bank Ease of doing’ index.

Connecting the Dots:

  1. Has the 14-year old strategic partnership between India and Brazil translated into a winning collaboration? Discuss

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