India and Brazil took steps to deepen economic ties on Saturday by signing an agreement to expand cooperation in mining and minerals, a move New Delhi says will help secure raw materials and technologies needed to support long-term growth in its steel sector.
The pact was finalised in New Delhi in the presence of India's Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva, who travelled to the Indian capital earlier this week for a three-day visit. Brazil ranks among the world's leading iron ore producers and holds extensive reserves of minerals used in steelmaking.
An Indian government statement said closer collaboration is expected to improve India's access to both raw materials and the associated technologies required to sustain expansion in its steel industry. The cooperation is structured to focus on attracting investment across three main areas: exploration, mining and steel sector infrastructure.
India currently has steelmaking capacity of 218 million metric tons. Companies in the country are expanding output to meet growing domestic demand, which the government links to ongoing infrastructure development and industrialisation.
Speaking at a meeting with a Brazilian delegation led by President Lula, Prime Minister Modi said discussions examined ways to deepen bilateral trade relations. "We are committed to taking bilateral trade much beyond $20 billion in the next five years," he said. Bilateral trade between India and Brazil stands at about $15 billion at present, according to the same statement.
Modi also indicated that the two countries will work closely in a range of high-tech and digital areas, naming technology, innovation, digital public infrastructure, artificial intelligence and semiconductors among the fields for cooperation.
Relations between the two nations have been described as strategic partners since 2006, with cooperation spanning trade, defence, energy, agriculture, health, critical minerals, technology and digital infrastructure. Brazil is identified as India's largest trading partner in the Latin America and Caribbean region.
The two governments also coordinate on certain global issues, including United Nations reform, climate change and counter-terrorism, the statement added. During discussions on Thursday, President Lula urged Brazil and India to consider settling trade in their own currencies rather than using the U.S. dollar, while rejecting speculation that the BRICS group would create a single common currency.
Summary
India and Brazil signed a mining and minerals cooperation agreement in New Delhi aimed at improving India's access to raw materials and technology for steelmaking. The package emphasises investment in exploration, mining and steel infrastructure, while leaders expressed a shared ambition to grow bilateral trade above $20 billion within five years.
Key points
- Agreement focuses on attracting investment in exploration, mining and steel sector infrastructure - sectors impacted: mining and steel.
- India has 218 million metric tons of steelmaking capacity and is expanding output to meet infrastructure-driven domestic demand - sectors impacted: steel production and construction.
- Leaders signalled cooperation in technology areas including AI and semiconductors, broadening the scope beyond basic commodities - sectors impacted: technology and digital infrastructure.
Risks and uncertainties
- Meeting the goal to raise bilateral trade significantly within five years is an ambition that depends on successful implementation of investment and cooperation measures - this affects trade and economic planning.
- Global competition for raw materials could influence how effectively closer ties translate into reliable access to minerals for India's steel sector - this impacts mining and commodity markets.
- Shifts in currency settlement preferences advocated during talks could introduce transactional uncertainty, even as officials dismissed the prospect of a BRICS common currency - this affects trade finance and currency markets.