KARAVAN ADVISORY ENTERPRISES LLP 

As the five BRICS nations (Brazil, Russia, India, China, and South Africa) agreed to increase, internal trade to up to $ 500 billion in the coming years at the recently-concluded summit in Goa, India has asked its LatAm partner Brazil to help expedite the process for the expansion of the India-MERCOSUR preferential trade agreement (PTA).

 

On the sidelines of the BRICS talks, during a bilateral meeting between Prime Minister Narendra Modi and Brazil’s President Michel Temer on October 17, both sides highlighted the issue. All the member countries have agreed to work together in a modular manner so that the expansion can be completed on time. Right now, India along with the four countries have set 2018 for an expanded India-MERCOSUR PTA. A group of four countries — Brazil, Argentina, Uruguay and Paraguay — have formed MERCOSUR. Together, they have a PTA with India and are seeking to expand it.

 

They also expressed the need to strengthen the India-MERCOSUR PTA  and expand the items on offer from both sides to at least 2,500 from the current 450 as this would greatly benefit the two way trade and need to have close cooperation between India, Brazil and other MERCOSUR partners so as to ensure that the expansion process does not spill over beyond end of next year.

 

At present, Brazil accounts for only 1.21 percent of India’s total trade at US$ 6.69 billion in 2015-2016. Hoping to accelerate this relationship, the Brazilian Ambassador to India, Tovara Da Silva Nunes, highlighted the important sectors that show scope for growth in their bilateral trade – medical equipment and medicines, aerospace, aeronautics, oil and natural gas, chemicals, fertilizers, and processed food. Additionally, market opportunities exist in the areas of food and drinks (coffee, tea, mate tea, fruits, cocoa, and confectionery products), home and building (woods), machinery and equipment (vehicles and auto parts), and mineral products.

 

India and Brazil exchanged four memorandum of understanding (MoUs) last week during BRICS, which included an Investment Cooperation and Facilitation Treaty; an MoU on Genetic Resources, Agriculture, Animal Husbandry, Natural Resources and Fisheries; an MoU on Pharmaceutical Products Regulation; and an MoU on Cattle Genomics and Assisted Reproductive Technologies.

 

The trade between Brazil and India can triple in a few years, Brazil President Michel Temer Saturday said amid the ongoing BRICS summit in Goa and bilateral talks between various member countries of the grouping.“With agreements, trade between Brazil and India can triple in a few years,” Temer tweeted after the BRICS event.

 

India and Brazil signed a bilateral investment facilitation agreement on the sidelines of the BRICS trade ministers meet at Goa, Marcos Pereira, Brazilian minister of industry, foreign trade and services, announced the decision after a meeting with his Indian counterpart Nirmala Sitharaman in New Delhi. The Investment Facilitation Treaty is the first with an Asian country and he expressed pleasure that it is happening with India.