INDIA PRIME MINISTER HEADS DELEGATION TO BRAZIL

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The President of Brazil, Luis Inacio “Lula” da Silva, is negotiating a strategic partnership with representatives from India. It is the largest bilateral agreement signed by his government since a Chinese delegation, headed by Hu Jintao, visited Brazil in 2004.

A group of government officials and businessmen from that country arrived in Brazil on Sept. 11th, with the objective of strengthening ties between the two countries and developing business opportunities.

The delegation from India, led by Prime Minister Manmohan Singh, left India for Brazil and Cuba to attend the IBSA (India-Brazil-South Africa) and NAM (Non-Aligned Movement) summits. Before leaving, while addressing reporters in New Delhi, Manmohan described the 116-member NAM as a “great movement.”

The delegation from India also includes approximately fifty business and industry leaders, who have been at the forefront of an accelerated process of international expansion. In the first six months of this year alone, Indian companies have acquired 76 companies in other countries, in deals that total US$ 5.2 billion.

This amount is just shy of what India received in direct foreign investments in 2005, US$ 5.5 billion.

Among the new acquisitions, the largest was the purchase of oil wells in Brazil by India’s state-owned ONGC Videsh, which invested US$ 1.4 billion in the deal, according to an assessment carried out by FICCI (Indian Federation of Trade and Industry Chambers). The oil industry has also attracted the attention of Australian Mine Planning & Construction, which has acquired rights to explore oil in Brazil. Brazil is the company’s most important destination after India.

The company’s general manager, Simran Bedi, said the investment, in its first phase, should reach US$ 1.5 billion, but that, over a period of fifteen years, capital expenditures should exceed US$ 18 billion.

India imports about 70% of the oil it uses, a fact which contributes significantly to its trade imbalances, especially with oil hovering around US$ 70/barrel. Last year, the country presented a US$ 42 billion deficit in its trade relationships, US$ 30 billion of which were caused by steep oil prices. Under these conditions, one of India’s main concerns is to foster cooperation with Brazil in the ethanol fuel business.

India’s largest sugar producer, Bajaj Hindusthan, has US$ 500 million in cash to invest in the sector in Brazil. Two other companies, Rajsheru and Renuka, have expressed interest in doing business with Brazil, according to R. Viswanathan, India’s former consul in Sao Paulo, currently the government official in charge of Latin America at the Indian Foreign Ministry.

Joint initiatives in agricultural R&D

Silvio Crestana, the president of the Brazilian Company for Research in Agriculture, known by its acronym in Portuguese, Embrapa, and India’s ambassador to Brazil, Hardeep Singh Puri, have signed an agreement, effective as of 2007, between Embrapa and the Indian Council on Agicultural Research (ICAR).

This agreement, dubbed an “Action Plan”, involves sixteen of Embrapa’s research units and provides for the education and training of Indian engineers and other professionals in Brazil, and of Brazilians at ICAR, in India. Sugarcane, soy, corn, fruit, and different vegetables are the main crops being contemplated. Plant biotechnology, integrated management of pests, water supply stewardship, and enhancement of animal health are also part of the agreement.

The Plan also provides for initiatives in germoplasm. Brazil will send to India different strains of banana, guava, corn, and wheat, among other plants, and will receive from India strains of soy that are resistant to Asian rust, as well as millet, sorghum, and wheat germoplasm. India will also work with Brazil to help that country improve its processes for extracting oil from papaya.

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