Brazil and India signed a non-binding memorandum of understanding Saturday on rare earths and critical minerals, according to Brazilian President Luiz Inácio Lula da Silva. The agreement aims to enhance reciprocal investment, exploration, mining, and artificial intelligence applications between the two developing nations as they work to diversify their trading relationships.
The deal reflects a broader strategy by India and Brazil, both founding members of the BRICS+ bloc, to reduce dependence on China and the United States through diversified partnerships and supply-chain autonomy.
Deal Details
The non-binding memorandum of understanding was signed during Lula’s state visit to India, which began Wednesday and extends through Sunday. The agreement establishes a framework for reciprocal investment, exploration, mining, and artificial intelligence applications involving rare earth minerals and other critical resources.
Lula highlighted the significance of the accord. “Increasing investments and cooperation in matters of renewable energy and critical minerals is at the core of a pioneering agreement that we have signed today,” he told journalists.
Brazil holds the world’s second-largest reserves of rare earth minerals, substances that are essential to manufacturing smartphones, electric vehicles, solar panels, and jet engines. The two countries also agreed on legal frameworks addressing entrepreneurship, health, scientific research, and education.
Strategic Context
The deal reflects a broader strategy by both India and Brazil to reduce economic and geopolitical dependence on China and the United States through diversified partnerships and supply chains. Oliver Stuenkel, an international relations professor at the Getulio Vargas Foundation, said the arrangement advances this shift toward autonomy.
“The reading is that, given how turbulent and unpredictable things have become, the more partners, the better,” Stuenkel said.
Brazil has pursued diversification for years. The strategy gained urgency after last year’s confrontation with the United States, which imposed a 50 percent tariff on Brazilian exports following a trial involving Trump ally Jair Bolsonaro. The U.S. later removed most of those tariffs and related sanctions.
Background and Scope
Lula was accompanied by 11 ministers and a large delegation of business leaders. He characterized the delegation as the largest of his journeys abroad, signaling his commitment to the relationship with India.
Both Brazil and India are founding members of the BRICS+ bloc of developing nations. Lula, who arrived Wednesday, participated in an artificial intelligence summit during his visit. Indian Prime Minister Narendra Modi visited Brazil in July of last year; the trip to India was Lula’s second state visit to that country.
Looking Forward
Roberto Goulart Menezes, an international relations professor at the University of Brasilia, said the United States confrontation prompted Brazil to reposition rare earths and critical minerals as central to its negotiating strategy. “Brazil began to reposition its understanding of the importance of these elements beyond their commercial dimension, recognizing their geopolitical relevance,” Goulart said.
He characterized the India agreement as a pilot arrangement. “For Brazil, this agreement represents a kind of pilot before negotiating with a country with which Brazil has an asymmetrical relationship,” Goulart said.
Lula is expected to visit Washington in the coming months.