Modi and Lula Strengthen Ties, Target $20 Billion Trade by 2030

Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva engaged in a significant phone conversation on January 23, 2026, during the ongoing World Economic Forum (WEF) in Davos. The two leaders reaffirmed their commitment to deepen the India-Brazil Strategic Partnership and outlined ambitious plans to enhance bilateral trade to $20 billion by 2030. This dialogue marks a pivotal moment as both countries seek to fortify their positions within the Global South.

In a post on social media, PM Modi expressed his enthusiasm about the discussion, highlighting the strong momentum in their partnership. He noted, “Our close cooperation is vital for advancing the shared interests of the Global South. I look forward to welcoming him to India soon.” President Lula reciprocated, indicating plans for a state visit to New Delhi from February 19 to 21, 2026, which will coincide with the 75th anniversary of diplomatic relations between Brazil and India.

The timing of this conversation is particularly relevant, given the recent imposition of unilateral tariffs by the United States on both Brazilian and Indian goods. With duties reaching as high as 50 percent, the dialogue between Modi and Lula appears to be a strategic countermeasure aimed at shielding their economies and reinforcing their collective voice on international platforms.

Both leaders emphasized the importance of collaboration across various sectors, including trade, energy, technology, and defense. They committed to working together within multilateral frameworks such as BRICS and G20 to advocate for a more equitable global trade environment.

Enhancing Economic Collaboration

The bilateral relationship between India and Brazil has evolved significantly since establishing diplomatic ties in 1948. With current trade figures standing at approximately $12 billion, the ambitious target of $20 billion by 2030 reflects a concerted effort to deepen economic ties. Key exports from India include pharmaceuticals, automobiles, and IT services, while Brazil is a major supplier of crude oil, sugar, and agricultural products.

To facilitate this trade, both nations are exploring the expansion of the India-MERCOSUR Preferential Trade Agreement. This agreement aims to broaden tariff lines beyond the current 450 items, potentially including automobiles and agricultural machinery, which could significantly enhance trade flows between the two countries.

The recent introduction of 10-year visitor visas for citizens of both nations is poised to encourage business travel and tourism. Announced in January 2026, this visa extension is expected to ease cross-border exchanges and may lead to the establishment of direct flights between São Paulo and Mumbai, reducing travel time and costs for professionals.

Strategic Cooperation in Defense and Energy

Energy security remains a cornerstone of the India-Brazil partnership. Brazil’s role as a leading crude oil exporter and its advancements in bio-fuel technology align well with India’s ambitious goal of achieving 20 percent ethanol blending in petrol by 2025-26. The Indian Oil Corporation has signed a memorandum of understanding with Brazil’s CNPEM to establish a research centre for bio-energy in India. Both nations are also exploring the creation of a joint bio-fuel research hub and a green-hydrogen corridor under the International Solar Alliance.

In the defense sector, collaboration is deepening with a recent memorandum of understanding focused on defense industry cooperation. This includes plans for joint development of unmanned aerial vehicles (UAVs), radar systems, and maintenance services. Indian Defence Minister Rajnath Singh has identified this partnership as one of the five pillars of cooperation, which contributes to international peace and security.

As India and Brazil navigate the complexities of global trade dynamics, their strengthened partnership not only aims to enhance bilateral ties but also seeks to carve out a unified voice for the Global South in international affairs. The upcoming state visit by President Lula is expected to further solidify these commitments and set the stage for future collaborations that will benefit both nations.