According to statistics recently released by the Brazilian Ministry of Development, Industry and Foreign Trade (MDIC), bilateral trade between Brazil and India grew by 20% in 2011, going from US$ 7.7 billion in 2010 to US$$ 9.2 billion in the following year, which indicates a new and irreversible pattern.
For many years, the puny and static commerce between the two countries, which was only US$ 800 million in 2001, disappointed many observers, because Brazil and India are the closest and most traditional strategic allies among developing countries in matters pertaining to the multilateral trade system.
This now appears to be behind as both countries have achieved a new threshold of economic development due not only to sound macroeconomic policies, but to more dynamic internal consumer markets, which ensures a sustainable growth in the bilateral trade.
In 2011, Brazil’s exports to India decreased by approximately 8% to US$ 3.2 billion and imports grew by about 43% to US$ 6.1 billion, according to the data released by MDIC. India had in that year a trade surplus of approximately US$ 2.9 billion with Brazil.
In the wake of such more dynamic trade, bilateral investments are also expected to grow as Brazil is rich in commodities and India thirsty to have access to them, with a view to ensuring a continued economic development for the future. India’s enormous internal markets should entice Brazilian multinational companies.
If Brazil is undoubtedly India’s largest trade partner in Latin America, the Asian country’s trade with the region as a whole has also grown considerably, going from US$ 23 billion in 2010 to US$ 25 billion in 2011, according to Indian statistics. After Brazil, Venezuela is India’s largest trade partner in the Latin America, followed by Mexico, Chile, Argentina and Colombia.
Many strategic policy makers in Latin America welcome such trend as diversification from trade with China is seeing as positive if not essential, in addition to ensuring better prices for the regional commodities in view of the increased demand.
On the other hand, certain important Indian think tanks are now targeting a 30% annual increase of bilateral trade between India and Latin America for the next 3 years, which will undoubtedly result in reciprocal economic gains and facilitate greater cooperation.
All governments concerned should be aware of this important development and urgently put in place very much needed business facilitation measures, including ease in the granting of business visas.
In addition, exchange of information and initiatives seeking greater cooperation, such as in banking, aviation and maritime frequencies. Greater cultural action could also enhance the business climate between India and Latin America.
After too long, India and Latin America seem ready to samba, salsa and tango together. Let’s hope governments can assist, rather than spoil this positive tendency.
Lawyer admitted in Brazil, England and Wales and Portugal. GATT and WTO panelist. Brazilian government ad-hoc representative for the Uruguay Round of the GATT. Post-graduation professor of the law of international trade.