Brazil and India

Businessworld

K.P. NAYAR

Diplomats are usually reluctant to acknowledge contributions by anyone outside their foreign offices towards improving relations with the outside world. But Brazil’s vice minister for external relations in charge of Asia, Ambassador Roberto Jaguaribe Gomes de Mattos, is an exception. He readily acknowledges that business leaders in India and Brazil have been the driving force in creating a new partnership between their countries and others have often followed the momentum in bilateral relations that was the result of economic opportunities.

Brazil’s president Luiz Inacio Lula da Silva and Indian Prime Minister Manmohan Singh are expected to provide a shot in the arm for their growing bilateral economic diplomacy when the former visits New Delhi from June 3 to 5.

Tata Motors and Marcopolo, a Brazilian company that specialises in body-building for buses and coaches, are two examples. Last year, they came together to create a joint venture in India to use Tata engines and chassis, and Marcopolo’s body-building expertise to produce 7,000 buses in India annually with an investment of Rs150 crore-200 crore. Marcopolo’s India venture will be its first in Asia and the company’s aim in tying up with the Tatas is to be in a position to tap into emerging opportunities in India for a Bus Rapid Transit System.




Hindustan Aeronautics (HAL) is considering a joint venture with Brazil’s Embraer, the world’s third-largest aircraft maker, for joint production of civilian aircraft. With India’s aviation sector booming, the demand for 80- to 100-seater planes and medium-sized cargo planes is set to rise. A tie-up between HAL and Embraer may open the doors for India’s entry into the production of civilian aircraft for the global market, now dominated by Boeing and Airbus.

The Indo-Brazilian economic partnership has complementarities and there are many areas in which India can contribute. For a country that is larger than the continent of Australia, the total length of Brazil’s railroad is merely 24,650 km. Not only does Brazil lack a unified network even on this limited railroad, ownership of this network is in the hands of several private companies. It is here that India is helping.

Bharat Earth Movers and Brazil’s Companhia do Comercio & Construcao have signed an MoU to manufacture wagons to modernise Brazil’s railway carriages. Brazil lacks in modern transport linkages because of its huge size and small population — rivers are the only means of transport in many parts of Brazil. RITES and IRCON are both stepping into this breach to create linkages that will allow for greater efficiency in the transport of Brazil’s agricultural products and minerals.

In turn, several Brazilian conglomerates are keen to take advantage of India’s appetite for infrastructure development. Among them are Odebrecht, Latin America’s leader in engineering, construction, chemicals and petrochemicals, Camargo Correa, a major service provider and investor in power generation, transport, sanitation and mining and Promon Engenharia, which has a global reputation as a provider of integrated solutions in manufacturing and oil and gas industries.

Other areas in which Indian and Brazilian businessmen are talking of collaboration include electricity transmission, processed wood industries and supply of automobile spare parts from India to original equipment manufacturers in Brazil.With the first trilateral summit of the India-Brazil-South Africa (IBSA) Dialogue Forum in Brasilia last September, attended by Manmohan Singh, Indo-Brazilian economic relations have received the added muscle of South Africa’s economy and the opportunities offered by its market. A recent UNCTAD study on the potential of IBSA countries points out that the global trade of India, Brazil and South Africa has risen from $300 billion in 2003 to $600 billion last year.

Bilateral trade has grown by more than three times in the last five years. Lula and Singh have set a target of $10 billion in bilateral trade by 2010.