India and Brazil: opportunities for a common growth path

The economic-political relations between India and Brazil are in excellent health. The two countries, in addition to boasting a long tradition of commercial and economic cooperation that dates back to the 17th century, today share a path of strong growth and have a common vision in relation to the new economic and geopolitical dynamics that are modifying and redesigning scenarios and global balances.

Currently, India and Brazil are among the largest and most important democracies in the world and represent the leading economies of their respective macro-areas, SAARC and MERCOSUR, as well as constituting their natural gateway; the run-up to the most advanced Western economies began some time ago and Brazil and India respectively represent the sixth and eleventh largest economies in the world, jointly contributing around 8.5% of global GDP.

Trade and investment flows between the two countries have grown enormously over the past decade, reaching USD 9.2 billion in 2011: specifically, Indian imports from Brazil stood at around USD 3.2 billion, while exports from India have reached 6 billion. Particularly interesting is the figure for Indian exports, which in 2011 recorded a growth of 43%, compared to 2010.

Further impetus to the strengthening of bilateral relations was given during the last summit of the BRICS countries, held last March in New Delhi: on that occasion the Brazilian President Dilma Rousseff and the Indian Prime Minister, Manmohan Singh, held important trade cooperation agreements on scientific, technological and biotechnological innovation, with the aim of diversifying their commercial portfolio and reaching the record figure of USD 15 billion by 2015, regarding bilateral trade.
Following Rousseff's proposal, aiming at even closer cooperation between the two countries, a subsequent meeting was held last June in Brasilia between Anand Sharma, Indian Minister of Trade and Industry, and Fernando Pimentel, Brazilian Minister of Development, Industry and Foreign Trade. The two countries have reached an agreement for the creation of a working group in the pharmaceutical sector and in the Life Sciences sector, and have also focused on the importance that an India-Brazil CEOs Forum could have, which could be able to implement the initiatives businesses of the two countries. India, during the meeting in Brasilia, also encouraged Brazilian companies to invest in the infrastructure and food processing sectors.

Such a strong commercial cooperation is favored by the complementarity of the two economies and by the advantages that can derive from them both: Brazil has an enormous variety of natural resources (agricultural products, forest and mineral resources) and India is one of the main consumers of these types of commodities, necessary to stimulate its industrial growth; in the services sector, India has emerged as a real powerhouse in terms of software and knowledge-based industry, and Brazilian companies intend to make use of this expertise; India must increase its agricultural production and to achieve full modernization of the sector, it can take inspiration from the enormous progress made by Brazil, which has managed to encourage the development of small farms through innovative payment methods.

Brazil also has to address the issue of housing for the weakest sections of the population. Brazilian statistics speak of a deficit of 23 million homes for low-income families over the next 20 years: in this regard, India has gained greater experience in this specific area and interesting partnerships could be created between Brazilian companies and their counterparts Indians, aimed at solving the problem, guaranteeing affordable housing.

India and Brazil have immense potential in various sectors such as agriculture, defence, minerals, energy, science, space, technology, education, health and well-being: the attractiveness and affinities of these markets can therefore increase business and commercial cooperation for companies intending to internationalise.

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