Study finds 367 opportunities to boost Brazil-India trade

Even with a slowdown in the first months of 2022, Brazil-India trade continued to grow at rates unmatched among the former’s major trading partners in 2021, compared to 2020, at an impressive rate of 63.5%.

Robust growth rates are expected to continue in the near future, which can facilitate Brazil’s position in exploring the 367 commercial opportunities identified by a recent study led by the country’s Export and Investment Promotion Agency (ApexBrasil) in the India market, more specifically in industries like mineral fuels, machinery, transport equipment, and chemicals.

In 2021, the Brazilian-Indian trade flow (export+import) totaled US$ 11.527 billion, with a substantial increase of 63.5% over the previous year. With an increase of 66.4%, Brazilian exports totaled US$ 4.799 billion, equivalent to 1.71% of total Brazilian exports, putting India in 13th among the main destinations for foreign sales.

On the other hand, India exported the equivalent of US$ 6.278 billion to Brazil (up 61.4% compared to 2020), accounting for a share of 3.07% of total Brazilian imports. As a result, the trade flow between the two countries totaled US$ 11.527 billion, with a significant increase of 63.5% compared to 2020. As a result, Brazil-India bilateral trade generated a surplus of US$ 1.924 billion for India. The data are from the Foreign Trade Secretariat of the Ministry of Economy.

Between January-September this year, the Brazil-India trade showed even more expressive figures, despite exports on both sides growing at a lower rate than those recorded last year. Brazilian sales increased 36.5% to US$ 4.489 billion, while imports rose 32.6% and totaled US$ 6.586 billion.

Trade flow totaled US$ 11.074, up 34.2% over the previous year. This year, the total volume of bilateral trade will easily exceed the amount of US$ 11.527 billion exchanged between the two countries last year.

See below the track record of container exports from Brazil to India, as well as Brazilian purchases from India between January 2019 and August 2022. The data is from DataLiner.

Brazil-India trade | Jan 2019 – Aug 2022 | TEUs

Source: DataLiner (click here to request a demo)

The Brazilian export agenda to India is quite diversified. Among the main products shipped are vegetable fats and oils (US$ 1.8 billion); petroleum oil (US$ 1.073 billion); non-monetary gold (US$ 627 million), sugars and molasses (US$ 171 million), and other products of the processing industry (US$ 148 million).

On the other hand, Indian exports are fuel oils (US$ 2 billion), followed by organo-inorganic compounds (US$ 813 million); insecticides, fungicides, etc. (US$ 445 million); other products from the manufacturing industry (US$ 322 million); and other medicines (US$ 287 million).

Rising economy and export diversification

The ApexBrasil study highlights that with a population of 1.4 billion people and a GDP of US$ 3.1 trillion, the sixth largest in the world, India’s economy enjoyed a solid economic growth rate of 8.6%, the highest average growth among the ten top global economies. This trend is expected to continue to expand in the coming years, thanks to favorable demographic factors, investments in infrastructure, trade liberalization, and an increase in domestic consumption.

The “Perfil País” (Country Profile) study by ApexBrasil on India draws attention to the need for diversifying the Brazilian export basket, warning that 76% of the value of Brazilian exports corresponded in 2021 to crude oil (with a share of 46.8 %), vegetable fats and oils (16.2%) and non-monetized gold (16%).

Competition is widespread in the groups of products that Brazil exports to India. China and the United Arab Emirates are India’s two main trading partners. They compete with Brazil in just one segment, non-monetized gold, which is also disputed with Switzerland.

In the case of crude oil, despite India being the third largest Brazilian market (after China and the United States), Brazil’s market share is only 1.9%. The most important oil exporters to India, Iraq, and Saudi Arabia have much more expressive shares, 23.5%, and 16.8%, respectively.

Argentina and Ukraine hold sway as suppliers of vegetable fats and oils, a market sector in which Brazilian exports have shown an average growth of almost 20% in recent years. Brazilian exports correspond to 9.1% of Indian imports of these products.

In fact, there is a vast field to be explored in trade between the two countries. Despite the strong increase registered in recent years, bilateral trade is not in line with the size and diversity of the Brazilian and Indian economies, the sixth and twelfth largest economies on the planet.

Brazil was only the 26th largest exporter to India last year (climbing to the 12th position between January to September this year), with a market share of just 0.9%, while India was the 5th largest exporter to Brazil, with a share of the Brazilian market of 3.1%.

Commercial opportunities

Apex’s study identified 367 business opportunities to be explored by Brazilian companies in the growing Indian market. They fall into five main groups. See them below:

1. Mineral fuels, lubricants, and related materials: with only one product and total imports totaling US$ 64.5 billion;
2. Goods and transactions not specified elsewhere in CUCCI: two products, of which India would import US$21.9 billion;
3. transport machinery and equipment: an $8.6 billion market involving 79 products;
4. Chemical and related products, a segment in which Indian imports totaled US$ 6.4 billion, and 79 products;
5. Others: a group that reaches US$ 14.1 billion in imports, where 206 commercial opportunities were identified for Brazilian exporters.

Source: Comex do Brasil

To read the full original article, please go to: https://www.comexdobrasil.com/perfil-pais-identifica-367-oportunidades-comerciais-para-impulsionar-ainda-mais-o-comercio-com-a-india/

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