The Brazilian Trade and Investment Promotion Agency (ApexBrasil) and the Confederation of Indian Industry (CII) signed a memorandum of understanding on Thursday (Aug. 27) to bring the two countries' productive sectors closer, G1 reported. The signing comes at a moment of reordered global trade, as surcharges imposed by the Trump administration push exporting countries to look for alternative markets. The move is part of President Luiz Inácio Lula da Silva's strategy to widen Brazil's export routes and reduce dependence on any single destination.
India's main interest is expanding its tariff preference agreement with Mercosur, the South American trade bloc in which Brazil is the largest member, currently limited to 450 product lines. On the Brazilian side, Development, Industry, Trade and Services Minister Márcio Elias Rosa pointed to sectors such as pharmaceuticals, bioenergy, biofuels, fertilizers and medical devices. He said bilateral trade grew 82% in recent years. Brasília also wants partnerships to develop critical minerals, inputs seen as strategic for the energy transition, provided the projects include the development of Brazilian technology. "Brazil wants partnerships for critical minerals with every country, never to the detriment of one or to favor another," Rosa said.
For Brazil, the memorandum works as insurance against a worsening trade dispute with Washington. This year, the United States applied two additional tariffs on Brazilian goods: a 25% rate after an investigation concluded that Brazil adopts practices that "burden or restrict" commerce, and a further 12.5% tied to an inquiry into forced labor oversight in supply chains. Part of Brazil's exports now faces a combined rate of 37.5%. Major items such as oil, coffee and beef were spared the additional charge, but sectors including footwear, machinery, wood and sugar remain under the maximum tariff.
Talks with Washington resume
Alongside the rapprochement with New Delhi, the government is preparing the formal resumption of negotiations with the United States. Rosa will meet virtually on Monday (Aug. 31), at 2:30 p.m. Brasília time, with United States Trade Representative (USTR) Jamieson Greer, with Foreign Minister Mauro Vieira also taking part. The meeting was made possible by a phone call of roughly 80 minutes between Lula and Trump last week, which, according to the minister, unblocked the negotiating table without Brazil making unilateral concessions in advance. On the agenda are lists of tariff exceptions and Brazil's Reciprocity Law, an instrument whose application process has already begun and could lead to tariffs on American products. The Brazilian plan is to split the discussion by sector, starting with capital goods, then the automotive and chemical industries.
"A pessimistic negotiator loses. So I am an optimist. It will obviously be a difficult dialogue. We will not propose anything that does not favor Brazilian interests. We would never propose something that could harm the national economy," the minister said.
One sensitive point in the negotiation is ethanol. Brazil charges an 18% tariff on corn ethanol imported from the United States and, according to government officials involved in the talks, would be willing to cut the rate if Washington grants broader access to Brazilian sugar. The US currently operates with import quotas: Brazil, the world's largest producer of the commodity, can export 155,000 tonnes a year at a reduced tariff, a volume the government considers small. Anything above the quota can be taxed at up to 100%.
Despite the public optimism, Brazilian negotiators heard by G1 admit a deal before the October elections is unlikely. While the talks move forward, the government is keeping emergency support measures for affected companies, such as the Brasil Soberano (Sovereign Brazil) program. Reporting on the India memorandum and the negotiating agenda is based on the minister's statements as covered by G1; other outlets had not independently covered the agreement by the time this article was written.