India and Brazil Bolster Economic Ties Amid Trump’s Tariff Escalation, Sparking BRICS Unity

India and Brazil are strengthening their bilateral economic cooperation in response to recent aggressive tariff measures imposed by the United States under President Donald Trump. Indian Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva spoke by phone to discuss ways to deepen trade ties and collaborate within the BRICS group, which also includes China, Russia, and South Africa. This call comes as both nations face the brunt of U.S. tariffs aimed at punishing their economic policies, particularly their continued purchases of Russian oil.

The leaders reiterated plans to increase bilateral trade significantly, targeting growth from $12 billion last year to over $20 billion by 2030. Additionally, they agreed to expand the preferential trade agreement between India and Mercosur, Brazil’s South American trade bloc, and to explore cooperation in digital payments systems, signaling a broadening of economic linkages beyond traditional trade.

These developments follow President Trump’s announcement of an additional 25% tariff on Indian imports, bringing the total duty to 50%, with similar tariff hikes targeting Brazilian goods. Trump’s administration linked the tariffs on Brazil partly to political tensions involving former Brazilian President Jair Bolsonaro. Lula criticized the U.S. tariffs as unilateral and protectionist, underscoring Brazil and India as the most affected nations in this trade conflict.

In light of these trade pressures, India is also shifting its foreign policy stance, with Prime Minister Modi reportedly planning a visit to China after a seven-year hiatus, indicating a potential diplomatic recalibration amidst growing tensions with the U.S. This move could hint at a broader realignment of India’s international relations in response to economic challenges.

Lula has positioned himself as a proponent of a more equitable global economic order, emphasizing the importance of emerging economies working collectively to counter protectionist policies by developed countries. The Modi-Lula dialogue exemplifies the intent of India and Brazil to convert shared external challenges into an opportunity for closer strategic and economic cooperation within the BRICS framework.

Source: Business day