The president of Brazil Jair Messias Bolsonaro was the chief guest during the Republic day parade in India in 2020. At political level the two countries are engaged through G-20 summit and BRICS meetings. The total trade between the two countries was USD 7.02 billion in 2019.The two countries aim to increase it to USD $ 25 billion by 2022. Brazilian President has been criticised in India for his critical remarks against pro-farmer policies including subsidies and cheap fertilisers that Indian government has adopted towards sugarcane farmers. Delhi and Brasilia have good political relations but in terms of defence cooperation and working together in promoting South-South cooperation, there are multiple avenues which the two countries need to explore.
Policy Recommendations
- The strategic understanding between the two countries needs to be explored and the two countries should identity areas of convergence. A strategic partnership agreement could be elevated to the level of comprehensive strategic partnership.
- For India, both Brazil and Japan are crucial partners in its economic development. The BRICS need a proactive approach of the two countries in highlighting the infrastructure needs in global south and should seek better avenues under the New Development Bank.
- The rapidly deteriorating security situation on the Latin America particularly with regard to inflation and food security is a matter of concern for both sides. The tension need to be diffused and both regional and international efforts are required.
- The two sides should look for convergence between India’s Eurasian approach with Brazil’s European policy initiative.
- One of the major areas for cooperation in defence sector is medium size aircraft. Brazil is a leader in building state of the art aircrafts (such as Embraer) and therefore cooperation can be explored. This can be explored under twining programme under “Make in India†initiative.
- The two countries can work in infrastructure development. India and Brazil could explore joint partnership in defence R&D, ship-building [LNG carriers] and IT sector. In IT sector hardware and software strengths of both countries can merge together. In finance sector accepting each other payment portals such as Rupay for India can help. Further, promoting e-commerce and research on payment security gateways would be helpful.
- The two countries have to take some decisions to enter into a Comprehensive Economic Partnership Agreement with focus on services sector. There might be issues related to tariffs but mutual benefits and areas need to be explored. In this regard, the domestic constituencies need to be sensitized particularly the competition between the two in global sugar market.
- Cooperation in health security areas between India and Brazil is recommended. There is potential for harnessing economies of telemedicine and Knowledge Process Outsourcing. Also joint research in generic medicines would help the poor population in both the countries.
- People to People connectivity needs to be strengthened. Indian and Brazil should focus on student exchanges and promote tourist inflows. In this regard flights frequency between India and Brazil through stopover or code sharing in Europe should be increased.
- In terms of institutional connectivity, linkages at think tank level need to be strengthened.
- Brazilian companies should assist in filling the missing gaps in the Caribbean nations and respective infrastructure and port projects. In this context an India-Brazil joint study on physical connectivity is proposed. Brazilian companies can explore feasibility to help and assist nations in India’s connectivity projects with Asia-Pacific countries.
- From India’s perspective, trade balance is not a hurdle as long as it is offset by the Brazil’s direct investment in India. However, Brazil should take measures to promote investment in India and also work towards creating better awareness about investment opportunities in India.
- To further promote bilateral economic cooperation; both countries must focus on following. Firstly, increase concessional rates for tariffs & simplify Rule of Origins (ROO) at regional level; secondly, increase the trade facilitation procedures; thirdly, concentrate on Global Value Chain(GVC) rather than trade volume and imbalance; fourthly, address imbalance of merchandise trade through the expansion of service trade.
- India and Brazil should also explore possibility of joint investment in many Latin American and Caribbean nations.
- Brazilian companies must offer qualitative and technological superior products in India. Awareness regarding Brazilian markets and products is relatively less. Trade offices should be established.
- Cultural differences can sometime lead to miscommunication. Keeping that in mind, it was proposed that investment centres in both Brazil and India may be established which can guide the investors especially to Small and Medium Enterprises (SMEs) and sensitise investors about cultural issues. Brazilian businessmen should also be given information about India’s culture, climate and geography to help them to understand India.
- Two way scholarships should be promoted. It was suggested that a research study assessing the possible investment in India could be undertaken.
- India and Brazil should jointly work on developing biomedical devices, clean water technologies, semi-conductors, chip fabrication and design, renewable energy and low cost IT products.
- Possibilities could be explored in Nano science where India is leader and Brazil exploring possibility in its application. Technology support and development could be explored between the two sides.
- The foreign ministries of the two countries may explore possibilities regarding mutual investment for greater integration with Global Value Chain (GVC).
(Pic Courtesy-FUNAG Brazil)
(Dr. Pankaj K Jha is Executive Director of Centre for Security and Strategic Studies, www.cescube.com)