Home >Opinion >Columns >Opinion | It’s time Brazil and India gave trade ties a turboboost

Brazilian president Jair Bolsonaro is on a visit to India as Indian Prime Minister Narendra Modi’s chief guest for Republic Day. What can we expect when the leader of South America’s largest nation visits South Asia’s largest country?

The two leaders will announce the usual sorts of accords ranging from Brazilian agricultural exports to cooperation in cybersecurity, technology and medicine. There will surely be speeches about friendship, and the need for developing nations to strengthen their global bargaining positions. This is positive and modestly advances relations.

But let us hope that the leaders bring larger ambitions to achieve a more enduring transformation. I have been privileged to visit India and Brazil many times, advising global companies on their commercial goals in both countries. And I see two unexpectedly similar countries that deserve to be essential partners in the 21st century.

It can be hard to appreciate the similarities between the two countries, as the differences predominate. One has a history dating back thousands of years, anciently settled and a true cradle of civilization. The other is a much younger country that still feels like a frontier nation pushing into its hinterland. They share little in common ethnically or religiously and, other than tiny Goa, no common language. Soccer and cricket could not be more different.

And yet, the differences mask enormous similarities. Both countries are vigorous democracies, where political parties form and merge and divide in a continual kaleidoscope. The press in both countries is robust, free and quite feisty. Politicians in both countries are free-wheeling and quick to speak out, and yet bureaucrats can be narrow and slow to the point of paralysis. States are politically influential and economically powerful, and commercial success often requires engagement at both the national and state levels.

Rich in human resources, both economies are driven by expanding middle classes clamouring for improved public services. Consumers in both are value-conscious, demanding durability and affordability.

I am convinced that a business executive who can succeed in Brazil producing durable products for a demanding and cost-conscious consumer could succeed in India equally well. And vice versa.

And yet, actual commerce between the nations is minuscule. Total trade stands at an underwhelming $7 billion, barely up from 2004 when for the last time a Brazilian head of state attended Republic Day, standing at $1.5 billion. Meanwhile, Brazil’s trade with China has ballooned from $4 billion to over $100 billion in the same period. And India’s trade with China hovers at around $90 billion. Clearly, money is being left on the table as far as India-Brazil trade goes.

So what can Modi and Bolsonaro do to help their businesses and their economies realize more of their potential?

Agribusiness is the most immediate and obvious opportunity. Complementary growing seasons and sizeable internal markets make the two countries ideally suited for partnerships in agriculture. India-based Shree Renuka Sugars is leveraging year-round sugar crushing in both countries to become one of the largest global sugar producers. Promoting Brazilian ethanol exports to India will be a major aim of President Bolsonaro. In exchange, Brazil is poised to help Indian farmers implement a more efficient ethanol programme that reduces reliance on subsidies and helps improve urban India’s air quality.

Beyond ethanol, opportunities abound in clean energy. Despite scepticism in both over the costs that developing countries may have to bear to combat climate change, Modi and Bolsonaro have set laudable goals for expanding the use of solar power. Each could benefit from a cross-fertilization of investment in solar power.

Or take electric vehicles, where Tata Marcopolo is already a promising collaboration. Brazil’s Marcopolo, a bus manufacturer, formed a joint venture with India’s Tata Motors to produce buses and coaches for the Indian market.

Changing trade policies are also creating momentum for collaboration. Brazil under Bolsonaro is turning its back on protectionism and forging new trade alliances. This shift, dovetailing with India’s withdrawal from Asia’s Regional Comprehensive Economic Partnership, opens a pathway for a new India-Brazil trade framework. Preferential treatment for each country’s goods would benefit the large multinationals in São Paulo and Mumbai, as well as small and medium-sized firms in Belo Horizonte and Curitiba, Hyderabad and Chandigarh.

Many of these small and medium-sized firms are providing innovative solutions to meet the demands of the middle classes in both countries. These firms are reshaping access to financial products and services through digital payments, microinsurance and online banking, to the benefit of entrepreneurs and small business owners.

Brazil and India are overdue for realizing the potential that exists between these formidable nations. When Modi and Bolsonaro hold talks, let us hope they are able to advance a meaningful commercial partnership that will launch more Tata Marcopolos, open the eyes of business leaders to new opportunities, and introduce a broader range of products to consumers in both countries. It is time for both leaders to look in the mirror and help each country see itself in the other, to the benefit of both.

Nelson W. Cunningham is president of McLarty Associates, a global strategy firm

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