India, seventh market for Brazilian exports; bilateral trade reaches 10.6bn dollars in 2012

Friday, March 22nd 2013 - 02:18 UTC

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Crude, soy oil, sugar and aircraft among the main sales of Brazil to India

By R. Viswanathan - India's trade with Brazil reached 10.6 billion dollars in 2012 (January to December), increasing by 15% from 9.2bn in 2011. Twenty years back, in 1992 bilateral trade was just 177 million dollars. Ten years back, in 2002, it was 1.2 billion dollars.
India's exports to Brazil declined in 2012 to 5.04bn from 6bn dollars in 2011.

Forty one percent of India's exports (2.1bn dollars) in 2012 were diesel exported by Reliance. The fall in India's exports in 2012 is due to the 33% decline in exports of diesel.

The second biggest export was chemicals and pharmaceuticals which amounted to 697 million dollars. The third largest export item was polyester yarn: 225 million dollars. Auto parts exports were 106 million dollars.

Besides these items, Indian exports are well diversified with a wide range of engineering products and industrial raw materials besides textiles and traditional items. Surprisingly coal was an important export, 99 million dollars.

India's imports from Brazil in 2012 totalled 5.58 billion dollars, increasing from 3.2 billion in 2011. Crude oil (imported by Reliance) accounted for 61% of imports: 3.4bn dollars. In fact, crude oil imports increased by 100% in 2012 from 2011.

Sugar (imported by Renuka Sugar) was the second largest import: 500 million dollars, accounting for 9 % of total imports. Soy oil imports were 364 million dollars and copper imports 294 million dollars.

Imports of Embraer aircraft amounted to 184 million dollars in 2012.

Of the total bilateral trade of 10.6 billion dollars Reliance alone accounted for 5.5 billion dollars with their import of crude oil and export of diesel.

In fact, this kind of exchange by Reliance has been the major factor for the significant growth in India- Brazil trade in recent years.

India is expected to increase its imports of crude oil in the coming years, given the growing capacity of Brazil to produce more oil and the ever-increasing dependence of India on imported oil.

India will also steadily buy more soy oil from Brazil to bridge the growing gap between domestic demand and production of edible oil. Copper imports will also go up in tune with the economic growth of India.

Renuka has regularly started importing sugar from Brasil in recent years. They imported for the Indian market in 2008-9 when India had a deficit in sugar production. In other years Renuka imports raw sugar, refine it in their facilities in India and export it as white sugar to other countries.

The Indian exports of chemicals, pharmaceuticals, engineering and other manufactured products as well as industrial raw materials will continue to increase steadily with the intensification of export promotion by the Indian exporters who are targeting Brazil as a large and growing strategic market.

The only exception is diesel export which will decline in the coming years as Brazil increases its refining capacity.

Bilateral trade with India accounted for two percent of Brazil' total trade of 408 billion dollars in 2012. It is significant to note that India has moved up as the seventh largest market for Brazil's exports.

The next milestone by 2016 should be 20 billion dollars…