Historical Background of India-Brazil Relations
India and Brazil have historically embraced democratic values and paved the way for formal diplomatic ties in 1948. Through the years, both countries have focused on enhancing bilateral relations and strengthening their partnership.
In the 1990s, India and Brazil established their embassies in each other’s capitals, further solidifying diplomatic interactions. The formation of various international and multilateral forums, such as BRICS in 2009, illustrated the growing cooperation between the two countries. This became a platform for discussing common interests and collaborating on global challenges.
Cultural exchanges have played an essential role in the evolution of the India-Brazil relationship. Various educational programs, art exhibitions, and cultural festivals have built connections between people that foster mutual understanding and appreciation of each country’s rich heritage and diversity.
India-Brazil : A Macroeconomic Lens
India and Brazil, two of the largest emerging economies, present distinct yet overlapping macroeconomic landscapes. While India has a technology-driven economy with a robust services sector, Brazil relies heavily on its agricultural and natural resource exports. Despite these differences, both countries have pursued similar economic policies over the years.
Brazil and India have applied similar policies to develop their economies in the context of import substitution regimes (1950/1990) characterized by high average tariffs on imports and heavy incentives aimed at developing local industry. Brazilian GDP was worth US$ 574 billion on average in 2000-2002, and India’s GDP was not too much smaller at US$ 489 billion. In 2017-2019, Brazil’s GDP went up to US$ 1.9 trillion, whereas in India this value reached US$ 2.7 trillion.
India-Brazil Relations
India and Brazil have established a strong bilateral trade partnership, exchanging key commodities and manufactured goods.
1. India’s Exports to Brazil: In 2022, India exported $9.78B to Brazil. The main products that India exported to Brazil were refined petroleum ($3.51B), pesticides ($1.06B), and nitrogen heterocyclic compounds ($354M). Over the past 5 years, the exports of India to Brazil have increased at an annualized rate of 25.2%, from $3.17B in 2017 to $9.78B in 2022.
2. Brazil’s Exports to India: In 2022, Brazil exported $6.43B to India. The main products that Brazil exported to India were soyabean oil ($2.36B), crude petroleum ($1.86B), and gold ($806M). Over the past 5 years, the exports of Brazil to India have increased at an annualized rate of 5.68%, from $4.88B in 2017 to $6.43B in 2022.
3. Recent Trade Data: In August 2024, India exported $704M and imported $478M from Brazil, resulting in a positive trade balance of $226M.
In 2012-22, the GDP of India has grown by 85.6% compared to Brazil, which grew its GDP by -22.1%. India has a population of 1.4bn, an inflation rate of 6.2%, and interest rates at 6.5%. While Brazil has a population of 0.21 bn, the inflation rate is at 4.76% and interest rates are at 11.25%.
The nations are navigating the complexities of the global economy and their individual developmental trajectories. Inflation rates have also played a significant role in shaping the economic environment of both countries. Trade volumes between India and Brazil have shown promising growth, with bilateral trade reaching approximately $8 billion in recent years. India’s outbound FDI in Brazil has been rising steadily, highlighting a mutual interest in fostering economic ties. Brazil also sees benefits from Indian investments, particularly in technology-driven sectors.
India-Brazil Bilateral Ties: The Strategic Importance
Their collaborative efforts in major international forums such as BRICS and G20, which facilitate dialogue and coordination on various global issues, underscore the relationship between India and Brazil. Both the countries are primary members of BRICS and IBSA (2003). Since the last IBSA summit in 2017, IBSA was overshadowed by the BRICS framework. Consequently, IBSA has faced challenges in maintaining its relevance and influence on the international stage. However, recently PM Modi has visited Brazil, Nigeria, and South Africa to bolster IBSA’s influence globally. There is a great need for a distinct voice that has sparked discussions about the revival of IBSA initiatives amidst changing global dynamics.
Global Implications of the India-Brazil Partnership
As two of the largest democracies in the Global South, their collaboration serves as a powerful voice in advocating for a fairer international trading system. Together, India and Brazil have engaged in various platforms, such as the BRICS and G20, to address imbalances in trade and promote sustainable economic development. Their joint efforts can reshape global supply chains, particularly in key sectors like agriculture, information technology, and pharmaceuticals, which are crucial for emerging economies.
Both nations are signatories to the Paris Agreement and actively participate in initiatives aimed at combating climate change. By championing renewable energy, preserving biodiversity, and promoting sustainable practices, the India-Brazil partnership exemplifies how emerging economies can influence global environmental policies. Their partnership offers a framework for other developing nations to collaborate in tackling shared issues, thereby boosting a more inclusive global dialogue.
Conclusion: The Road Ahead for India-Brazil Relations
India and Brazil have built a dynamic partnership that extends across diplomacy, trade, and multilateral cooperation. As they continue to deepen economic ties, their joint efforts in global governance and sustainable development in shaping the future of emerging economies. The continued growth of this partnership will not only benefit both nations but also contribute to a more balanced and inclusive global economic landscape.
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