In a significant stride toward enhancing South-South cooperation, India and Brazil have announced
plans to deepen their Preferential Trade Agreement (PTA) under the MERCOSUR framework. This development, unveiled during a high-level meeting in New Delhi on October 16, 2025, signals a renewed commitment to bolstering bilateral trade and investment amid shifting global economic dynamics.
Brazilian Vice President Geraldo Alckmin meets Indian Defence Minister Rajnath Singh in New Delhi, October 2025.
The joint declaration, issued by Brazilian Vice President and Minister of Development, Industry, Trade and Services Geraldo Alckmin, and India’s Minister of Commerce and Industry Piyush Goyal, builds on the 2003 Framework Agreement between India and MERCOSUR—a bloc comprising Argentina, Brazil, Paraguay, and Uruguay as full members, with Bolivia in the process of accession and Venezuela suspended. The existing PTA, which offers tariff concessions on 450 Indian products and 452 from MERCOSUR, ranging from 10% to 100%, has facilitated bilateral trade, which reached $12.19 billion in 2024-25. Now, both sides aim to expand this substantially, targeting $20 billion in bilateral trade by 2030.
The declaration emphasises a comprehensive expansion that covers tariff and non-tariff barriers, with active private-sector involvement. A key next step is establishing a technical dialogue through the Joint Administration Committee, aiming to conclude negotiations within a year. Brazil has pledged to coordinate with its MERCOSUR partners for a swift, mutually beneficial outcome. This move comes as India seeks to diversify export markets, particularly in Latin America, amid global trade tensions.
Coinciding with World Food Day, the announcement was complemented by the India-Brazil Business Dialogue, where Goyal highlighted shared agricultural strengths, noting that India and Brazil are two of the world’s leading agri-producers. They contribute significantly to global food security. Goyal expressed optimism for deeper collaboration in agribusiness and food processing, potentially addressing challenges like supply chain disruptions and climate impacts.
Quoting Prime Minister Narendra Modi, Goyal described India-Brazil relations as “as colourful as a carnival and as passionate as football.” He also commended Brazil’s integration of yoga and Ayurveda into its healthcare system, paving the way for cultural and wellness exchanges.
Central to Goyal’s address was India’s robust economic trajectory. The nation recorded 7.8% GDP growth in the first quarter of 2025, retaining its status as the fastest-growing major economy for the fourth consecutive year. This aligns with the International Monetary Fund’s upward revision of India’s 2025 growth projection to 6.6%, despite global headwinds like U.S. tariff hikes.
India’s contribution to global GDP growth: Historical and projected trends (1991-2030).
Goyal outlined three pillars underpinning India’s growth under Modi’s leadership. First, strong macroeconomic fundamentals: low inflation, fortified banking, and foreign exchange reserves exceeding $700 billion—ranking India among the global top five. These provide resilience against external shocks.
The second pillar is modern infrastructure development, extending to remote areas to enhance competitiveness and reduce logistics costs. Over the past decade, investments in roads, ports, and digital connectivity have spurred job creation and innovation, supporting startups and entrepreneurs.
Third, improving the quality of life through tax reforms. Recent GST simplifications, effective September 22, 2025, have lowered rates and boosted compliance, increasing disposable income for the middle class. Goyal noted that 250 million Indians have escaped poverty in the last 12 years, fostering a consumption-driven economy.
These reforms have drawn international acclaim, including from IMF Chief Kristalina Georgieva, who praised India’s bold initiatives. Goyal reiterated India’s ambition to become the world’s third-largest economy, targeting $30-35 trillion by 2047, fuelled by inclusive growth and structural reforms.
Analytically, this deepening of ties holds profound implications. For India, access to MERCOSUR’s market of over 290 million people could boost exports in sectors such as pharmaceuticals, automobiles, and textiles, while allowing imports of Brazilian commodities such as soybeans and iron ore at preferential rates. Bilateral trade with Brazil alone stood at $12 billion in 2024, with India’s exports at $6.77 billion. Recent figures show India’s July 2025 exports to Brazil surging 37.5% to $791 million.
For Brazil and MERCOSUR, partnering with India—a rising economic powerhouse—offers diversification beyond traditional allies like China and the EU. Amid delays in the EU-MERCOSUR trade deal, this South-South pivot could counter protectionism.
However, challenges loom. Negotiating non-tariff barriers, such as agricultural sanitary standards, will test resolve. Geopolitical factors, including Brazil’s BRICS role and India’s Quad engagements, may influence dynamics. Yet, the one-year negotiation timeline suggests urgency.
Quoting Brazilian President Luiz Inácio Lula da Silva, Goyal remarked, “No one can reap the fruit before planting the trees.” India and Brazil have sown the seeds of partnership; if nurtured, they could yield prosperity in a multipolar world, exemplifying the collaborative potential of emerging economies.
