Global Insider: Brazil-India Relations


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The Editors | Bio | 23 Mar 2011

Brazil and India recently signed an agreement to improve air travel between the two countries, the latest small step in a broad bilateral relationship. In an email interview, Oliver Stuenkel, a fellow at the Global Public Policy Institute in Berlin, discussed Brazil-India relations.

WPR: What is the state of trade between Brazil and India, including areas of complementarity and competition?

Oliver Stuenkel: Trade between Brazil and India has grown significantly since the end of the Cold War, from $400 million in 1999, to $2 billion in 2005, passing $7 billion in 2010. A trade agreement between Mercosur -- a regional trade bloc that includes Brazil -- and India was signed in 2004 and took effect in 2009, though it covers barely 3 percent of the products traded between the two. Indian companies have focused on investment and joint ventures in Brazil's IT, energy, sugar, agrochemicals and pharmaceutical sectors, and Brazilian products such as soy and processed food are in growing demand in India. Once Brazil is able to tap into its recently discovered vast oil resources, energy-poor India is likely to be an important customer. The same is true for iron ore, of which Brazil has the world's largest reserves. Indian pharmaceutical laboratories, including several big exporters of generic medicines, have formed joint ventures and installed factories in Brazil.

WPR: What are the concrete areas of political cooperation in global affairs between the two?

Stuenkel: Political cooperation during the Cold War was, with few exceptions, almost nonexistent. This slowly changed in the 1990s, when both countries opened up. Cooperation reached a high point in 2003, when Brazil and India jointly led the developing world during the trade negotiations in Cancun, and when IBSA, a trilateral outfit with South Africa, was created. Brazil and India later created the G-4, along with Japan and Germany, in a formal bid to permanently join the U.N. Security Council, pointing to both countries' hopes to create a more equitable world order. The G-20 in the World Trade Organization and the BRIC (Brazil, Russia, India, China) label provided yet another opportunity to engage. Both regard themselves as important international actors who have not yet been granted adequate status and recognition in international institutions. While progress in reforming voting shares at the World Bank and the International Monetary Fund has been slow, Brazil and India have benefited immensely from coordinating their efforts.

WPR: What are some of the opportunities and challenges for increased bilateral cooperation moving forward?

Stuenkel: First, India and Brazil provide powerful counterexamples to the Chinese model, showing that political freedom is no obstacle to economic growth. As former developing countries, Brazil and India have more legitimacy in the eyes of developing countries than developed nations do. They should make use of that legitimacy more frequently, for example by pressuring Zimbabwe's president, Robert Mugabe, to respect the terms of the unity government with Prime Minister Morgan Tsvangirai.

Second, there is potential for large-scale knowledge-sharing regarding economic development. Forty million Brazilians and 300 million Indians still live below the poverty line, and social mobility remains low due to the lack of universal education. The creation of IBSA has helped to institutionalize knowledge-sharing, and such efforts should be expanded. Also, the Indian Council for Agricultural Research has started to engage with its Brazilian counterpart, Embrapa, to help India take yet another quantum leap with regard to agricultural productivity.

Finally, as they rise economically, both countries will become agenda-setters for the emerging powers' political discourse. Their joint challenge will be to not merely seek a seat at the table of the international institutions, but to engage, assume leadership and offer constructive ideas to deal with the world's most pressing challenges.

Read also:

Seeing India through Brazilian eyes

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Book review: “The New Brazil” by Riordan Roett