Prime Minister Narendra Modi is visiting Brazil to attend the Sixth BRICS summit in Brazil on 15-16 July. During his meeting with President Dilma Rouseff, PM Modi will review the bilateral relations with Brazil with which India is committed to a strategic partnership.
Indo-Brazil partnership soared to new heights during the term of the visionary president Lula da Silva in 2003-11. But his successor Dilma Rouseff has given the least priority to foreign policy, focusing more on domestic issues. Her approach in combination with the passive policy of the former PM Manmohan Singh meant loss of momentum in bilateral relations in the last three years. PM Modi, who has Lula-like vision, would have to take the initiative and re-energize the Indo-Brazil ties.
The IBSA alliance, a fascinating combination of the leading democracies of the three continents has come to be marginalized by BRICS in recent years. But IBSA is equally important, if not more, for India. IBSA's objectives are distinct from those of BRICS in which China and Russia represent the status quo in global power equations. PM Modi should talk to the Brazilian and South African Presidents to rejuvenate IBSA and keep its identity and aspirations alive.
After the BRICS summit on 15 July in Fortaleza, the Brazilians have organized a meeting for the BRICS leaders with the Presidents of South America on Wednesday 16 July in Brasilia. This is a clever and imaginative attempt by the Brazilians to bridge their regional leadership with their BRICS alliance. This is perhaps the first time that an Indian Prime Minister will get an opportunity to meet the South American leaders together.
In the last two decades, the South American leaders have started pursuing a more autonomous and assertive foreign policy with strong belief in a multi-polar world and multi-lateralism. They have freed themselves from the stigma of being called as the backyard of United States.
This is evident from their success in thwarting the US proposal to form a hemispheric Free Trade Area of the Americas. They have preferred to become collectively strong through UNASUR (South American Union). In this context, the South American leaders, most of them from the pragmatic centre-left, will welcome Modi's proactive role in global affairs and will look forward to working with India on many issues of common interest.
South America is emerging as a contributor to India's energy and food security. Venezuela, Brazil, Ecuador and Colombia have started supplying crude oil to India regularly. While there is growing gap between India's domestic production and demand, South America has the potential to increase its oil production and exports in the future. India has been importing more than a billion dollars worth of soy and sunflower oil from Brazil and Argentina annually. Here again India's need for more imports in the future will be met by the increasing production by the two South American countries, who are agricultural powerhouses, with large areas of arable land, abundant water reserves and advanced technologies. India has been importing annually over 2 billion dollars worth minerals (copper is the main item of import) from South America which has rich mineral resources. India will need more of these to fuel its high economic growth.
On the other hand, the South American political and business leaders view India as a new, large and growing market for their exports. Conscious of the perils of over dependence on China, they are keen to diversify and cultivate India as a trade partner.
Argentina learnt this lesson when China imposed a ban on imports of Argentine soy oil in 2010 to express their displeasure with Argentina on some other issue. Argentina, the world's largest exporter of soy oil, was shocked since China was till then the largest importer of Argentine soy oil. Argentina was greatly relieved and grateful when India came to its rescue by doubling its imports of soy oil from Argentina in that difficult year.
The South American governments and consumers are happy with the Indian pharmaceutical companies which have helped them to reduce their cost of health care with low cost generic medicines. The governments of Brazil and Chile had taken initiatives inviting the Indian pharmaceutical companies and welcoming their entry. The South Americans also appreciate the fact that the Indian IT companies which provide jobs and training for their young people.
As South America is emerging as a significant trade partner, India should deepen and widen the PTAs (Preferential Trade Agreement) with Chile and Mercosur and consider upgrading them to FTAs and also sign FTAs with Colombia and Peru, the second and third largest destinations of India's exports to South America. India should increase Lines of Credit to South American countries and sign Double Taxation Avoidance Agreements with the major countries to facilitate Indian investment and exports.
By Ambassador R. Viswanathan
Distinguished Fellow, Latin America Studies, Gateway House, Indian Council on Global Relations