09-September-2024-Special-Article

INDIA-BRAZIL BILATERAL RELATIONS

India and Brazil, two emerging global powers, share a robust and multifaceted strategic partnership that has deepened over the years. Their collaboration spans a wide array of sectors, including defence, space, security, technology, and people-to-people ties.

Both countries are significant players in global economic forums and have worked together to address global challenges such as climate change, trade disputes, and energy security.

A key development in their relationship has been the resolution of the World Trade Organization (WTO) trade dispute over sugar subsidies, reflecting their mutual desire to cooperate more closely in global trade and technology.

India-Brazil Sugar Subsidies Dispute

Background:

• In 2019, Brazil, along with Australia and Guatemala, filed a complaint against India’s sugar subsidy policies at the WTO.
• These nations argued that India’s subsidies violated the WTO’s Agreement on Agriculture.
• The United States and Australia also criticized India’s failure to include sugarcane in domestic support notifications since the 1995-96 marketing year.

India’s Stand:

• India defended its position by stating that sugar procurement is handled by private mills, not the government, ensuring compliance with fair trade rules.
• India argued that the calculation of subsidies by the US and Australia was flawed, as it considered total sugarcane production, including portions not delivered to mills for processing.

Resolution:

• In a significant development, India and Brazil resolved the dispute amicably in 2023, focusing on further collaboration in ethanol technology and addressing global sugar surplus challenges.

India Brazil relations

Institutional Engagements:

• Multilateral Forums: India and Brazil are active partners in global forums such as BRICS, IBSA, G4, G20, and the International Solar Alliance (ISA).
• Strategic Dialogue: Regularly led by National Security Advisors (NSAs) to discuss regional and global security matters.
• India-Brazil Business Leaders Forum: Focuses on expanding trade, investment, and economic cooperation.
• Trade Monitoring Mechanism (TMM): Helps in identifying and resolving trade issues between the two countries.
• Economic and Financial Dialogue: Covers areas like trade, investment, and monetary policies.
• Joint Defence Commission: Facilitates defence collaboration through joint military exercises, equipment sharing, and intelligence exchange.

Trade and Investment:

• India became Brazil’s 5th largest trading partner in 2021, with bilateral trade growing from USD 7.05 billion in 2020 to USD 15.2 billion in 2022.
• In 2023, India’s exports to Brazil reached USD 6.9 billion, while imports amounted to USD 4.7 billion.
• Key Indian Exports: Agrochemicals, synthetic yarn, and auto parts.
• Major Imports from Brazil: Crude oil, gold, vegetable oil, and bulk minerals.
• Investments have been prominent in sectors like automobiles, IT, mining, energy, biofuels, and footwear.
• India has a Preferential Trade Agreement (PTA) with MERCOSUR, which includes Brazil.

Defence and Security Cooperation:

• Defence Agreement (2003): The countries signed a defence cooperation agreement to enhance joint military activities and strategic dialogues.
• Cybersecurity Cooperation: An MoU on Cybersecurity was signed between India’s CERT-In and Brazil’s counterpart in January 2020.

Science and Technology:

• Space Collaboration: India and Brazil’s space cooperation began in 2004, focusing on data sharing and satellite tracking.
• In 2021, the Brazilian Minister witnessed the launch of Amazonia-1, a satellite designed for Earth observation.
• Brazil recognizes Ayurveda and Yoga as part of its health policy. A Memorandum of Understanding (MoU) on Traditional Medicine and Homeopathy was signed in 2020.

Energy Cooperation:

• Bioenergy Partnership: In 2020, an MoU was signed between Indian Oil Corporation and Brazil’s CNPEM for bioenergy research.
• Ethanol Blending: Brazil, a leader in ethanol technology, supports India’s Ethanol Blending Program (EBP). Brazil has achieved a 27% ethanol blend in gasoline, while India, as of July 2024, reached 15.83% and aims for 20% by 2025-26.

Challenges in India-Brazil Relations

Trade Deficit and Competition:

• India consistently faces a trade deficit with Brazil due to Brazil’s dominance in agricultural exports, especially soybeans and sugar.
• Both nations have employed protectionist policies like tariffs and subsidies, leading to trade frictions.

Diverging Interests in International Forums:

• Climate Change: While India focuses on reducing emissions intensity and promoting economic development, Brazil emphasizes reducing deforestation in the Amazon to combat climate change.
• Multilateral Bodies: Differences in priorities are also seen within forums like the WTO and the United Nations, where their interests may not always align.

Limited People-to-People Contact:

• Interaction between the people of India and Brazil is relatively low in areas such as business, cultural, and educational exchanges.

Role of China:

• Brazil’s close trade relationship with China, its largest trading partner, raises concerns that this could influence India-Brazil relations, particularly in trade and economic cooperation.

Way Forward

Strengthening Economic Ties:

• Diversifying trade to include more value-added goods and services can benefit both nations.
• Promoting bilateral trade through agreements and joint ventures, along with investments in infrastructure, can improve trade relations.

Enhancing People-to-People Connections:

• Encouraging cultural exchanges, tourism, and student programs can strengthen ties between the two nations.

Strategic and Defence Cooperation:

• Enhancing defence collaboration through technology sharing and joint military exercises can strengthen strategic ties.
• India and Brazil can collaborate in global forums like the UN and G20 to promote mutual interests.

Advancing Technology and Innovation:

• Collaboration in research and development (R&D) across sectors like renewable energy, biotechnology, and information technology (IT) can spur innovation.
• Joint investments in skill development and training programs can enhance workforce competitiveness.

Conclusion

The India-Brazil strategic partnership continues to grow stronger across multiple sectors. By addressing challenges and fostering cooperation in areas like trade, defence, energy, and technology, both countries can unlock significant mutual benefits while also enhancing their role in global governance.

Mains question:

1. “Discuss the evolving India-Brazil bilateral relationship, highlighting key areas of cooperation and challenges, and suggest measures to enhance their strategic partnership.” (150 WORDS)