India and Brazil will discuss possible expansion of the existing India-MERCOSUR preferential trade agreement and a number of pacts for collaborating in the area of oil and gas, including bio-fuel, science and technology, space and agriculture and food processing during Brazilian President Jair Bolsonaro visit later this week, the Ministry of External Affairs said.
Bolsonaro, who will be the chief guest at this year’s Republic Day Parade on January 26, is leading a high-powered delegation comprising eight Ministers, senior officials and influential business representatives during the four-day visit beginning January 24.
“India is eager to expand its PTA with MERCOSUR. We will discuss it with our Brazilian counterparts,” said Vijay Thakur Singh, MEA Secretary (East), at a press conference on Thursday.
Singh said there will be intense discussions between the government and the industry on cooperation in oil and gas, especially in the area of hydrocarbons, bio fuel and minerals.
The MERCOSUR countries, including Brazil, Argentina, Paraguay and Uruguay, have been engaging with India for expanding the tariff lines covered under a bilateral PTA, which could give a big push to trade. New Delhi wants to expedite the matter as it wants to use the pact to increase its foot-print in Latin America.
India could also gain from collaborating in the area of bio-fuel, as Brazil is the world’s second largest consumer and producer of bio-fuels. In fact, last month, the Union Cabinet approved for signing of Memorandum of Understanding between India and Brazil on bio-energy cooperation.
The MEA Secretary said there will be agreements in agriculture, food processing and animal husbandry as both countries shared the same genetic heritage.
Agri-trade potential
Brazilian Agriculture Minister Tereza Cristina Correa da Costa Dias is already in India and had a meeting with her Indian counterpart Narendra Singh Tomar on Thursday. Tomar said at $1.04 billion, the agriculture trade between the two countries is way below potential and is not reflective of the strengths of the economies. “We are interested in diversifying our commodity basket with regard to agricultural exports to Brazil. Brazil imports onions, fresh and dried grapes, wheat, maize, rice, soyabean and cotton from other countries of the world. I would request Brazil to explore sourcing these agricultural items from India,” Tomar said.
Bilateral trade between India and Brazil increased to $8.2 billion in 2018-19, It comprised $3.8 billion of Indian exports to Brazil and $4.4 million as imports by India. Major Indian exports to Brazil include agro-chemicals, synthetic yarns, auto components and parts, pharmaceuticals and petroleum products. Brazilian exports to India include crude oil, gold, vegetable oil, sugar and bulk mineral and ores.
Indian investments in Brazil were at around $6 billion and Brazilian investments in India are estimated at $1 billion in 2018, as per government figures. Brazilian investments in India are mainly in automobiles, IT, mining, energy and biofuels sectors. India has invested in Brazil's IT, pharmaceutical, energy, agri-business, mining and engineering sectors.