NEW DELHI — India and Brazil took a significant step toward strengthening their economic partnership on Saturday when Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva oversaw the signing of a pact aimed at expanding cooperation in mining and minerals. The agreement comes as India seeks to bolster its steel industry amid surging domestic demand driven by infrastructure projects and industrialization, while tapping into Brazil's vast reserves of critical raw materials.
The pact was inked during Lula's three-day visit to New Delhi, which began earlier this week. Brazil, one of the world's leading producers of iron ore, holds substantial reserves of minerals essential for steelmaking, according to an Indian government statement. This collaboration is expected to enhance India's access to these resources and related technologies, supporting the long-term growth of its steel sector.
India currently boasts a steelmaking capacity of 218 million metric tons, with major companies actively expanding production to keep pace with rising needs. The agreement emphasizes attracting investments in exploration, mining operations, and infrastructure within the steel sector, the statement added. Officials from both nations highlighted how this move fits into broader efforts to secure supply chains in a global competition for raw materials.
In remarks to a Brazilian delegation led by Lula, Modi emphasized the potential for deeper ties. "We are committed to taking bilateral trade much beyond $20 billion in the next five years," Modi said, noting that current trade volumes between the two countries stand at approximately $15 billion. He also outlined ambitions to collaborate in emerging fields such as technology, innovation, digital public infrastructure, artificial intelligence, and semiconductors.
The leaders' discussions underscored a multifaceted partnership that has evolved since India and Brazil established strategic ties in 2006. Areas of cooperation span trade, defense, energy, agriculture, health, critical minerals, technology, and digital infrastructure, according to government sources. Brazil serves as India's largest trading partner in the Latin America and Caribbean region, fostering close alignment on international matters including United Nations reform, climate change initiatives, and counter-terrorism efforts.
Lula's visit provided an opportunity to explore innovative approaches to trade. On Thursday, the Brazilian president advocated for conducting transactions between India and Brazil in their respective national currencies, moving away from reliance on the U.S. dollar. He dismissed rumors that the BRICS group — which includes both nations alongside Russia, China, and South Africa — might introduce a common currency, clarifying that such speculations were unfounded.
The mining pact aligns with India's broader strategy to diversify its sources of critical minerals, especially as global demand intensifies due to the green energy transition and manufacturing booms. Indian steel producers have long relied on imports for iron ore and other inputs, and closer ties with Brazil could reduce vulnerabilities to price fluctuations and supply disruptions from traditional suppliers like Australia and China.
During the signing ceremony, Modi hosted a meeting with the Brazilian delegation, where talks focused on practical steps to elevate the partnership. The Indian prime minister reiterated commitments to mutual growth, pointing to shared interests in sustainable development. Brazilian officials, speaking on condition of anonymity, expressed optimism that the agreement would open new avenues for technology transfer in mining practices, potentially benefiting environmental standards in both countries.
Contextually, this development occurs against a backdrop of Lula's active diplomacy in Asia, following his recent engagements in other emerging markets. His trip to India marks a continuation of efforts to revitalize South-South cooperation, a hallmark of his administration since taking office in January 2023. For India, the timing is apt as Modi's government pushes for self-reliance in key industries under the 'Make in India' initiative.
Experts in international trade have noted the pact's potential ripple effects. According to analysts at the Observer Research Foundation in New Delhi, enhanced mineral cooperation could accelerate India's infrastructure goals, including ambitious projects like high-speed rail networks and smart cities that demand vast amounts of steel. One researcher, speaking to The Appleton Times, described the deal as "a pragmatic response to geopolitical shifts in global commodity markets."
While the agreement outlines broad areas of focus, specifics on investment commitments remain under negotiation. Indian officials indicated that follow-up mechanisms, including joint working groups, would be established soon to monitor progress. Brazilian mining giants, such as Vale S.A., which dominates iron ore production, are reportedly keen to explore opportunities in India, though no direct investments were announced during the visit.
The partnership's evolution reflects changing dynamics within BRICS, where India and Brazil often align on multilateral reforms. Both nations have pushed for greater representation of developing countries in global financial institutions, a theme likely to feature in upcoming summits. Lula's currency proposal, while not part of the mining pact, signals a willingness to challenge dollar dominance, echoing sentiments from other BRICS members.
Looking ahead, the pact could pave the way for more comprehensive economic dialogues. Modi and Lula are scheduled to meet again on the sidelines of international forums, where they may address trade barriers in agriculture and pharmaceuticals — sectors where bilateral exchanges have grown steadily. Indian exporters, particularly in pharmaceuticals, view Brazil as a key market, with exports reaching over $1 billion annually in recent years.
Beyond economics, the visit highlighted cultural exchanges, with events showcasing Brazilian music and cuisine in New Delhi. This soft diplomacy complements the hard negotiations, fostering goodwill that could sustain long-term collaboration. As one Indian diplomat put it, "These ties are not just about steel and ore; they're about building bridges between two vibrant democracies."
In summary, the mining pact represents a milestone in India-Brazil relations, promising to fuel industrial growth while navigating global uncertainties. With trade targets set high and cooperative horizons expanding, both leaders appear poised to leverage this momentum for mutual prosperity in the years ahead.