Syllabus: GS Paper II: Bilateral agreements

Why in the news?

India and Brazil have recently intensified efforts to expand their bilateral trade, investment, and energy cooperation under the framework of BRICS and MERCOSUR, at a time when global trade is being reshaped by US tariffs and protectionist measures. 

• The recent meeting between Brazil’s Vice President and India’s Commerce Minister in New Delhi reaffirmed the two nations’ commitment to deepen engagement through a substantial expansion of the India–MERCOSUR trade agreement, originally signed in 2003.
• Both countries also agreed to target $20 billion in bilateral trade by 2030 (up from $12 billion in 2024), highlighting a strategic convergence of interests in energy security, technology, climate resilience, and South-South cooperation.

Historical background of India–Brazil ties

India and Brazil established diplomatic relations in 1948, and since then, their partnership has evolved from cordial political ties to a multifaceted strategic partnership. Key milestones include:

• 2006 – India–Brazil Strategic Partnership announced.
• 2003 – Signing of the India–MERCOSUR Preferential Trade Agreement (PTA).
• 2019 – 15th India–Brazil Joint Commission Meeting focused on defence and agriculture cooperation.
• 2024–25 – Renewed focus on trade, bioenergy, defence, and digital collaboration under BRICS and G20.
  

Economic and Trade Cooperation

1. Trade Trends and Targets

• Current bilateral trade (2024): ~$12 billion.
• Target by 2030: $20 billion.
• Trade balance: Tilts in Brazil’s favour, primarily due to India’s crude imports.
• Key Trade Components
  • India’s Exports to Brazil: Pharmaceuticals, automobiles, chemicals, machinery, IT services.
  • India’s Imports from Brazil: Crude oil, sugar, soya oil, gold, and pulp

3. MERCOSUR Framework

• MERCOSUR members: Brazil, Argentina, Paraguay, Uruguay, and Bolivia (pending full membership).
• The India–MERCOSUR PTA (2003) aims to expand preferential tariff coverage and reduce non-tariff barriers, enhancing market access for both sides.
• The proposed expansion will address tariff preferences, rules of origin, investment facilitation, and digital trade.
  

Strategic Cooperation in Energy, Defence, and Technology

1. Energy Partnership

• Brazil is among the world’s top biofuel producers; its sugarcane-based ethanol technology complements India’s ethanol blending mission (E20 target by 2025).
• India has invested over $3.5 billion in Brazil’s upstream oil and gas sector, making Brazil India’s largest investment destination in the Americas.
• Petrobras (Brazil’s state oil company) supplies crude oil to Indian refiners under long-term contracts.
• Both nations are exploring green hydrogen, bioenergy, and renewable energy grid integration as part of their clean energy transition.

2. Defence Cooperation

• Defence ties were reviewed in a recent meeting between the Indian Defence Minister and Brazil’s Vice President.
• Brazil’s Embraer Aerospace Corporation has established an office in Delhi, and its aircraft are already used by the Indian Air Force and Star Air.
• Collaboration in defence production, joint research, and maintenance services underlines the “Make in India–Make for the World” model.

3. Aviation and Space

• The Indian Air Force’s use of Embraer jets demonstrates aerospace collaboration potential.
• In the space domain, both nations have cooperated under BRICS Remote Sensing Satellite Constellation, opening avenues for joint satellite data sharing for agriculture and disaster management.
  

Multilateral and Global South Cooperation

1. BRICS

• Both are founding members of BRICS (2009), along with Russia, China, and South Africa.
• Under BRICS, they advocate for reform of global financial institutions, expansion of the New Development Bank (NDB), and a multipolar world order.

2. India–Brazil–South Africa (IBSA) Dialogue Forum

• Established in 2003, IBSA remains a South-South cooperation platform for promoting democracy, inclusive growth, and multilateral reform.
• IBSA focuses on poverty alleviation, renewable energy, and women’s empowerment projects across developing nations.

3. G20 and Global Governance

• Both nations have been strong advocates of the Global South:
  • India championed digital public infrastructure (DPI), humanitarian assistance, and the inclusion of the African Union into G20.
  • Brazil, as G20 chair in 2024–25, has emphasised food security, health equity, and climate justice.

How Stronger India–Brazil Ties Can Give the Global South a Bigger Say?

1. Strengthening Multipolarity in Global Governance

• Both India and Brazil are leading voices of the Global South, advocating for a multipolar world order that reflects contemporary realities rather than post-World War II power structures.
• Closer coordination in multilateral forums (UN, WTO, IMF, WHO, etc.) can push for reforms in global institutions to make them more democratic and representative.
  

2. Coordinated Push for UNSC Reform

• India and Brazil are both members of the G4 grouping (India, Brazil, Germany, Japan) seeking permanent seats in the UN Security Council.
• A united diplomatic effort can strengthen the Global South’s demand for equitable representation in global decision-making bodies.
  

3. Boosting South–South Cooperation

• Enhanced bilateral and multilateral cooperation between India and Brazil within IBSA (India-Brazil-South Africa) and BRICS frameworks strengthens South–South development models.
• It promotes the idea of mutual learning and technology sharing, rather than dependency on Western aid or institutions.
  

4. Shaping Global Economic Architecture

• Both are major emerging economies with large domestic markets — India (5th largest) and Brazil (8th largest).
• Joint advocacy for reform of Bretton Woods institutions and trade liberalisation under WTO can help rebalance global trade rules in favour of developing economies.
  

5. Leadership in BRICS+ and G20

• With Brazil chairing G20 in 2024 and India’s successful G20 Presidency in 2023, stronger coordination can ensure policy continuity for issues vital to the Global South — such as climate finance, digital inclusion, food and energy security.
• Within BRICS, their partnership can shape the BRICS Bank (NDB) into a major alternative financing mechanism for developing countries.
  

6. Collaboration in Climate Diplomacy

• Both are tropical, biodiversity-rich nations and key members of the Global Biodiversity Framework.
• By jointly pressing for climate justice and equitable carbon transition funding, they can make the climate narrative more inclusive, representing the needs of the developing world.
  

7. Building a Global South Technology and Innovation Corridor

• Cooperation in agriculture, renewable energy (biofuels, solar), space, digital technologies, and health research can demonstrate a self-reliant innovation ecosystem driven by Southern nations.
• For instance, India’s digital public infrastructure model and Brazil’s bio-energy expertise can be jointly exported to Africa and Latin America.
  

8. Reforming Global Food and Energy Systems

• As agrarian powerhouses, India and Brazil can jointly influence global agricultural trade norms, ensuring fair market access and food security for developing nations.
• Coordinated positions in biofuel alliances (like the Global Biofuel Alliance launched by India) can ensure cleaner energy transitions for the Global South.

9. Cultural and Civilizational Diplomacy

• Both nations represent plural, multicultural democracies of the Global South.
• Greater cultural, academic, and media exchanges can create a shared South identity that challenges dominant Western narratives.
  

10. Strategic Partnership for a Fairer Global Order

• India and Brazil’s partnership embodies the principle of equality and mutual respect among Global South nations.
• Together, they can build coalitions of consensus within global forums to amplify Southern perspectives on development, debt restructuring, and digital governance.
  

In Summary

Stronger India–Brazil ties mean a louder, more unified Global South — one capable of shaping global norms, reforming institutions, and ensuring equitable growth.
By aligning their economic, diplomatic, and developmental priorities, both countries can transform the Global South from a voice of demand into a voice of direction

Challenges and Constraints

• Tariff and regulatory barriers: Despite the PTA, many Indian exports face high tariffs and procedural delays in Brazil.
• Logistical bottlenecks: Absence of direct shipping routes increases transport costs.
• Limited private sector engagement: Low awareness among MSMEs about trade potential.
• Currency and payment challenges: Dollar dependence raises vulnerability to global fluctuations.
• Geopolitical balancing: Navigating ties amid differing alignments with the US and China.
  

Way Forward

• Expand the MERCOSUR Agreement:
  
  • Broaden tariff lines beyond 450 items to include automobiles, pharma, IT services, and agri-machinery.
  • Incorporate e-commerce, digital standards, and supply chain resilience clauses.
    
• Energy & Biofuel Collaboration:
  
  • Launch a Joint Biofuel Research Centre leveraging Brazil’s sugarcane expertise and India’s ethanol mission.
  • Create a Green Hydrogen Corridor under the International Solar Alliance (ISA).
    
• Defence & Space Synergy:
  
  • Formalise a Defence Cooperation Framework (2025–30) for co-development of UAVs and radar systems.
  • Boost collaboration through BRICS satellite network for climate monitoring and disaster response.
    
• Connectivity & Trade Facilitation:
  
  • Develop a South Atlantic Trade Corridor, connecting Indian ports with Brazil’s Santos and Recife ports via African interlinks.
  • Use rupee-real payment mechanisms for trade settlements.
    
• Multilateral Alignment:
  
  • Strengthen the Global South coalition at WTO, G20, and UN forums.
  • Institutionalise a BRICS–IBSA interface for policy coordination on health, food, and climate.
    

Conclusion

The India–Brazil partnership is a cornerstone of the emerging Global South architecture—anchored in shared democratic values, sustainable growth, and strategic autonomy. As both nations expand cooperation in energy, defence, biofuel, and digital innovation, they are not just strengthening bilateral ties but reshaping global governance toward inclusivity and balance. The expansion of the MERCOSUR pact and strategic BRICS engagement will consolidate their leadership as voices of the developing world in the evolving world order.

Mains Practice Question

“The India–Brazil partnership has evolved from a symbolic South–South cooperation to a substantive strategic relationship. Discuss its role in shaping the economic and geopolitical architecture of the Global South.”

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