India and Brazil sign rare earth and critical minerals pact to cut China reliance
India and Brazil sign rare earth and critical minerals pact to cut China reliance
M.U.H
22/02/202610
India and Brazil on Saturday entered into a memorandum of understanding on cooperation in rare earths and critical minerals as New Delhi seeks to reduce its dependence on China, which accounts for nearly 90 per cent of India’s import of such materials.
The memorandum was signed after bilateral deliberations between Prime Minister Narendra Modi and Brazilian President Luiz Inácio Lula da Silva. According to the joint statement issued after their meeting, the two leaders welcomed the signing of the MoU on cooperation in rare earth elements and critical minerals and hoped this would give an impetus to bilateral cooperation, thus strengthening the supply value chains and global competitiveness in mineral exploration, mining, processing, recycling and refining of critical minerals.
Briefing mediapersons on the visit later, secretary (east) in the external affairs ministry, P. Kumaran, said Lula gave a detailed presentation on Brazil’s substantial critical minerals and rare earth reserves. According to Lula, only 30 per cent of Brazil’s reserves have been explored and there is substantial scope for exploration, processing minerals and using them. Kumaran quoted Lula as saying that Brazil will value India’s partnership in the area of critical minerals, and India will explore ways to take this forward.
Both leaders also acknowledged the need to advance energy transitions and recognised the critical role of alternative sources of energy such as sustainable biofuels, sustainable aviation fuel (SAF), solar, wind, hydroelectric and nuclear in energy transformation and transition for meeting climate goals.
On the trade front, the two leaders were hopeful of bettering the bilateral trade target of $20 billion by 2030 set during Modi’s visit to Brasilia in July 2024. India’s bilateral trade with Brazil is the largest compared to any other country in South America. It currently stands at $15.21 billion.
“In July 2025, the two leaders had set a bilateral trade target of $20 billion by 2030. Today, the two leaders agreed trade should at least double to $30 billion by 2030. India enjoys a trade surplus of about $1.5 billion with Brazil, with our exports totalling about $6.7 billion against imports of about $5.4 billion,” Kumaran said.
Discussions were also held on ways to strengthen and diversify bilateral trade through the expansion of the India-Mercosur Preferential Trade Agreement (PTA). Mercosur is a South American trading bloc comprising Brazil, Argentina, Uruguay, Paraguay and Bolivia. Currently, the PTA covers 450 tariff lines, and India and Mercosur have agreed to significantly and substantially expand it.
Asked how many more tariff lines would be added, Kumaran said there have been a few rounds of discussions. “We are discussing which areas can be opened up… there are sensitivities on both sides when it comes to agriculture and some industries that need protection according to national priority on either side… All are keen to diversify and build resilience in supply chains,” he said.
