India’s ‘dear friend’ is back in power in Brazil, and a $30 billion trade opportunity is on the table

Prime Minister Narendra Modi’s congratulations to Brazilian President-elect Luiz Inácio Lula da Silva on his re-election have brought back the spotlight on a bilateral ties that has grown from modest trade ties into a broader economic and diplomatic relationship, with both countries seeking a greater voice for developing economies.

In a post on X, Modi called Lula his “dear friend” and said he looked forward to deepening the India-Brazil Strategic Partnership. He said the two countries would strengthen cooperation across sectors, advance the shared priorities of the Global South and work towards a more inclusive, equitable and sustainable world.

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Brazil is India's largest trading partner in the Latin America and Caribbean region, and the two countries work closely on global issues such as U.N. reform, climate change and counter-terrorism. India-Brazil ties have evolved across Lula’s presidencies, gaining momentum during his first two terms from 2003 to 2010 and expanding further after his return to power in 2023. The two countries' shared ambition was to give large developing economies a stronger say in international institutions and negotiations.

Trade ambitions

The economic relationship has expanded considerably since Lula’s first presidency. Bilateral trade reached $15.21 billion in 2025, up more than 25% from $12.2 billion in 2024, according to India’s Ministry of External Affairs. Trade in the first six months of 2026 totalled $8.77 billion, a rise of nearly 37% from the same period a year earlier.

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India exported $8.35 billion worth of goods to Brazil in 2025, including petroleum products, chemicals, pharmaceuticals and engineering products. Its imports from Brazil, worth $6.85 billion, included crude oil, soybean oil, raw sugar, cotton and iron ore.

During his latest visit to India this year, Lula set a target of raising bilateral trade to $30 billion, saying the economic potential of the two countries was strong. This is more ambitious than the $20 billion target that Modi had earlier set for 2030.

Lula has also described India as a “democratic brother of the Global South”. Speaking at the India-Brazil Economic Forum in New Delhi, he stressed that the relationship was based on equality and mutual respect.

“What is really more important is that when we’re talking about a negotiation with a country like India, we are not dealing with a coloniser,” he said, contrasting the relationship with negotiations involving wealthier countries.

Strategic partnership

The groundwork for the current relationship was laid during Lula’s first two terms. His visit to India in January 2004 as chief guest at the Republic Day celebrations gave bilateral ties a high-profile push. In 2006, India and Brazil formally elevated their relationship to a strategic partnership during then Prime Minister Manmohan Singh’s visit to Brazil.

The two countries agreed to deepen commercial engagement and cooperation in technology, energy security and international security. They also sought to expand investment and business links, giving the relationship a wider agenda beyond trade.

Lula has also spoken about how his engagement with India influenced Brazil’s economic thinking. Recalling a visit to India in the mid-2000s, he said he had recognised the importance of holding foreign exchange reserves after observing India’s reserves, which then stood at about $100 billion.

“It was in India in 2005 that, for the very first time, I perceived the importance of having international hard currency reserves.”

Brazil subsequently built its reserves to around $360 billion, he said, describing the move as important to the country’s economic resilience and standing in international financial institutions.

Common voice for Global South

India and Brazil also used their growing ties to coordinate on issues affecting developing economies. In 2003, they joined South Africa to launch the India-Brazil-South Africa Dialogue Forum, or IBSA, providing a platform for the three countries to work together on development and international affairs.

The grouping’s first summit-level meeting was held in Brasília in 2006. Its agenda included cooperation in agriculture, energy, health, education, science and technology.

The three countries sought to translate their shared concerns into a stronger voice in global institutions. India and Brazil also coordinated through the BRIC grouping with Russia and China, which held its first summit in 2009 and its second in Brazil in April 2010.

BRICS diplomacy

Lula’s re-election could give fresh momentum to India-Brazil cooperation within BRICS, particularly on reforming global institutions such as the UN Security Council. Both countries want developing economies to have a greater say in international decision-making, with India pushing for a permanent seat on the Council.

Lula has also advocated settling bilateral trade in local currencies rather than relying solely on the US dollar. During his February 2026 visit to India, he said the two countries could explore using the rupee and the Brazilian real for trade payments, though he acknowledged the challenges involved.

“It is not necessary that a trade agreement between India and Brazil has to be done with US dollars. We can use our own currencies. It is difficult, but we can try."

Warmth in ties

The partnership has also been marked by gestures of cultural exchange. Lula recalled arranging a musical surprise for Modi during the Indian prime minister’s state visit to Brasília in July 2025, when Brazilian hosts played Modi’s favourite song at the Palácio da Alvorada.

During his own visit to India, Lula said he was pleasantly surprised when Indian hosts played Brazilian songs, including the folk composition Asa Branca, at official engagements.

The exchanges reflected the personal warmth between the two leaders, alongside the economic and diplomatic interests underpinning the relationship.

For India and Brazil, the challenge now is to turn that goodwill into deeper trade, stronger investment and sustained cooperation on global issues. The foundations were laid during Lula’s first presidency; the latest trade targets and agreements point to an effort to build on them.