ICWA-FUNAG SEMINAR BRAZIL–INDIA: 70 YEARS OF DIPLOMATIC RELATIONS 16 – 17 May 2018 Paulo Nogueira Batista Auditorium Brasilia Lecture Series “70 Years of Brazil-India Relations (Where we came, current challenges in bilateral relations and road for greater approximation)” Prof. Abdul Nafey School of International Studies Jawaharlal Nehru University New Delhi • ’70 Years’ is a fairly long time-frame to identify “challenges” and delineate scope for “greater approximation”. Let me cover the last 10-12 years – that is, the period since 2006 when Brazil and India decided to lock themselves into a ‘strategic partnership’. The period tells us a lot about the possibilities of “greater approximation” and also the “challenges” which are, I am afraid, mostly of our own making. Here four points are in order: 1. A seminar like this, brining the two think-tanks together, would have been unthinkable some ten years ago. Of all the countries in the LAC region, Brazil alone is India’s ‘strategic partner’ – meaning thereby that there are some identified long-term complementarities in the areas of development, democracy, security and diplomacy, etc. 2. The two countries have rich intellectual capital – an intellectual capital which is capable of developing alternative discourse on development and global order. 3. As their horizons expand and capabilities rise, the challenge for Brazil and India is whether they want to seize the momentum of agenda-setting at regional and global levels. 4. At the minimal level, they need to talk to each other regularly. Simply because, it is in their respective “national interests” – doesn’t matter how narrowly their governments of the day define the term “national interest”. The state of ‘in-betweenity’ • States such as India and Brazil are “in-between” states. What is this state of ‘in- betweenity’? They do many things; but they cannot do everything. They are not a pushover either. Also they are too big to fit into anybody’s pocket. Countries like Brazil and India invariably would have a mind of their own on most issues of global and regional importance. • In the past, they had more limited number of resources; may be they still need resources more to spend on their huge domestic agendas. But as their capabilities rise, you see them undertake greater responsibility ; and even launch global initiatives on their own. The capability-commitment gap has narrowed down a lot. • From their own historical experiences, they also bring to the international agenda new issues and values to champion – issues and values which are much closer to the hearts and minds of other developing countries too. • India and Brazil do lots of things which are right at the international level; though they may not be grabbing the global headlines – the way great powers do. • All of the above make the ‘in-between’ states essentially coalition builders. Brazil and India are excellent coalition builders. By that very experience, they also bring consensus and harmony in diverse national positions on specific issues. Strategic partnership: for what and why?; • The answer perhaps lies in the statement, signed here in Brasilia in September 2006, and the Joint Statement that was released after the bilateral meeting between Prime Minister Narendra Modi and Brazilian President Michel Temer in Goa in October 2016. The two statements incorporate a whole range of ideas; they read almost like a wish-list. They are an expression of intention; an identification of wide-ranging interests where mutuality and complementarities exist between the two countries. 2006 – The 2006 document identified 3 principal strands to their strategic partnership: bilateral, regional and international – To “intensify” links in trade, agriculture and science and technology. The two countries also signed some eight MOUs; interestingly in some very specific areas – human settlement, plant health protection, cultural festivals; (& football). – To start a strategic dialogue on “regional and international issues” – among others on energy security, and international terrorism. – “Closer coordination in international forums”. Mention was made of WTO and the UN Security Council – one stuck on the issue of protectionism and trade distorting practices of the rich countries, and the other on its outdated composition and structure. Context and the mood was very different • There was a context, a background to the Joint Statement and creation of the ‘strategic partnership’ in 2006. • Starting in the 1990s, Brazil’s foreign policy orientation and interests had begun moving towards the dynamic economies of Asia. As for India, the process of economic liberalization, which started in the early 1990s, had begun producing positive results in the second half of the 1990s in the form of higher and sustained growth rates. • At the turn of the century, thoughts, interests and policies had begun converging. As Brazil and India discovered complementarities, they had also begun to converge their views on a number of global issues: crisis of UN multilateralism; discriminatory and trade distorting practices of the developed world; and negative fall-outs of economic globalization. • The upshot of all this was the increase in the number of high level visits; and rise in two-way trade. Starting around 2001, Brazil discovered the Indian pharmaceutical sector. By 2005, Indian pharmaceutical firms had a the annual business of over $400 million with Brazil – supplying bulk drugs, finished formulations as well as local production. Major Indian pharma companies had set up subsidiaries/manufacturing plants by 2005-06 – Ranbaxy, Strides Arco Labs, Torrent, Claris Life Sciences and Wockhardt. It is said that thanks to cooperation in the area of pharmaceuticals, Brazil had become the fifth largest producer of generic drugs by 2005 – which had a deep meaning for Brazil’s public health programme. • Indian IT companies also made a huge impact. TCS had set up its software development centres in various countries of the LAC region; its operation in Brazil alone employed more than 1200 local staff in 2005. Be it pharma or IT, Indian companies, it was said, created jobs and imparted new skills and knowledge to the local staff. Given the value addition and knowledge-based thrust of Indian ventures, a write-up in the New York Times (21 June 2006) had speculated whether India could be a model of a knowledge economy for Latin America. • Ethanol and sugar were other areas where Indian business showed interest in investment. ONGC Videsh Ltd. (OVL), followed by other Indian oil companeis, had arrived in Brazil in search of both oil producing assets and prospecting and production in the offshore sector. • Two-way trade crossed the $2 billion mark. In 2005, Indian export to Brazil had reached $1.20 billion and import from Brazil was $1.13 billion. Increased numbers in visits and trade were a reflection of change in the mindsets at the political and business levels in the two countries. • India’s GDP growth rate of 9% and above, starting 2005, made big Brazilian companies take note of the promise and power of the emerging economy. CVRD, the mining giant of Brazil, announced opening of its office in New Delhi. Petrobras of Brazil showed keenness to enter into oil exploration and production and had a tie-up with GAIL. Marco Polo, the Brazilian bus body building company, formed a joint venture with Tata Motors in 2006. There was scope for production of aircrafts in collaboration with Embraer of Brazil. Defence was another area wherein India and Brazil showed interest for cooperation. • In 2004, President Lula visited India. He galvanized the Mercosur into signing the Preferential Trading Agreement (PTA) with India in March 2005. Preferential duty (10-20 per cent in most cases) was given to 450 Indian products entering Mercosur and reciprocal concession given to 450 products of Mercosur entering India. It was agreed that the PTA would become effective in 2006 after parliamentary approvals. • Mind-sets had changed at both the levels of government and private business. In 2007, Brazilian president came to India at the head of more than 100 Brazilian businessmen. Brazil-India CEOs Forum was established with Tata and Petrobras heads leading the charge. • Global context was favourable. In a span of two months, Brazil and India had become one trillion dollar economies – Brazil in April and India in May 2007. At multilateral level, the two countries were also moving in concert – formation of the G-4; India and Brazil in G-20+ of agricultural exporting countries etc. • Historical context thus tells us that the ‘strategic partnership’ had a rationale and a justification. 2016 • A decade later, the two countries decided to “reinforce” their strategic partnership. Prime Minister Narendra Modi and President Michel Temer agreed in their bilateral meeting at Goa in 2016 to “scale up” their engagement. – The world had changed a lot since 2006. The Joint Statement (16 October 2016) acknowledges that the decade long bilateral strategic partnership has “opened a new phase” for India-Brazil relations. The detailed document, running into about two thousand words, covers about everything that Brazil and India could conceivably think of for cooperation. – The Joint Statement also elaborated upon the institutional mechanisms. It contains a list of fairly large number of commissions, committees and panels for dialogue and to hammer out convergences to cover a host of issues from trade to agriculture, science & technology to animal husbandry. – As in 2006, the