The growing India-Brazil axis

While their shared ambitions of getting permanent seats on the United Nations Security Council brought India and Brazil together, their common aspirations of becoming global powerhouses has contributed to the two countries joining hands to energize their economies. This was the unambiguous statement that come out of Brazilian President Luiz Inacio Lula da Silva’s three-day visit to India.

India and Brazil signed seven pacts during Lula’s visit, covering

areas ranging from oil exploration to cultural exchanges, trade, education, space, and audio-visual co-production.
Of the seven pacts signed, it is the energy-exploration deal signed by the chiefs of India’s state-run Oil and Natural Gas Corp (ONGC) and its overseas arm, ONGC Videsh Ltd, and Brazil’s Petroleo Brasileiro SA (Petrobras) that has generated the most excitement in the two countries.

ONGC is said to have offered Petrobras a 15-40% stake in its three deepwater blocks in the Mahanadi, Krishna-Godavari and Cauvery basins off India’s east coast. Petrobras has offered a 25-30% stake to ONGC in three blocks in the Barrierinhas, Sergipe-Alagoas and Santos basins off the east coast of Brazil. The deal will give ONGC Videsh an increased presence in Brazil and marks the entry of Petrobras into India.

Brazil has offered India its expertise in biofuels and farming. It is the world leader in processing ethanol, producing 16 billion liters a year. India, which imports 70% of its fuel requirements, sees biofuels as a major solution to its energy problem. Already it is Brazil’s largest customer of ethanol. Brazil is keen to draw on Indian expertise in pharmaceuticals and engineering.

Cooperation in the field of civilian nuclear energy is another potential area where the two sides expect to work together. But before the potential in that field can be tapped, India needs to get restrictions on its engaging in nuclear trade lifted. India is seeking the support of Brazil, a prominent member of the Nuclear Suppliers Group (NSG), to that end.

Asia Times