Tariff-Hit India, Brazil Talk To Expand Preferential Trade Pact

India and Brazil undertook talks for the expansion of a preferential trade pact, with market access issues and areas of cooperation in pharmaceutical and banking sectors, according to an official statement on Tuesday.

These topics were discussed during the India-Brazil Trade Monitoring Mechanism Meeting in New Delhi.

Both countries were hit by reciprocal tariffs as high as 50% by the US. India had a 25% tariff on its goods and services as a part of US President Donald Trump's reciprocal tariffs policy where 10% tariffs were imposed as a baseline on every country.

The US imposed another 25% tariffs on India for purchasing crude oil from Russia, bringing the total amount to 50%. Trump accused India of "funding" Russia's war against Ukraine.

Brazil was also tariffed at 10% at the baseline with an additional 40% tariffs imposed over Trump's disapproval of the sentencing of Jair Bolsonaro the former president of Brazil to 27 years of prison time for attempting to overturn the 2022 election results which he lost to Lula De Silva.

The discussions also included the review of bilateral trade and investment relations and the expansion of the India-Mercosur preferential trade agreement.

Mercosur is a trading bloc in Latin America, comprising Brazil, Argentina, Uruguay and Paraguay.

The India-Mercosur preferential trade agreement came into effect on June 1, 2009. This PTA has limited coverage and contains only 450 tariff lines or products.

The other issues, such as market access, visa issues, sectoral collaborations in pharmaceuticals and healthcare, chemicals and petro-chemicals, medium and small enterprises, banking, and finance, were also discussed in the meeting.

Brazil is the largest trading partner of India in the Latin American and Caribbean region. During 2024-25, the bilateral merchandise trade stood at $12.19 billion. The country has set a target to increase it to $20 billion over the next five years.

The meeting was co-chaired by Commerce Secretary Rajesh Agrawal and Tatiana Lacerda Prazeres, Secretary of Foreign Trade at the Ministry of Development, Industry, Trade and Services.

The outcome of the meeting will be reviewed by the Vice President of Brazil and the Minister of Commerce and Industry of India during the visit to India next week.

(With PTI Inputs)