Economic Concert, Collaboration and Prospective of Trade between India and Brazil

Abstract

To throw light on the possibilities and limits of meaningful coalitions among emerging countries, this article focuses on Indo-Brazil trade relations. The article evaluates the structure of comparative advantage for India and Brazil and the change in the economic scenario over a 17-year period from 1995 to 2011. The article attempted to evaluate India–Brazil trade using revealed comparative advantage (RCA) and revealed import dependence (RID) analysis in exports and imports in different type of goods categorized on the basis of their production. The analysis shows broad similarities in the structure of comparative advantage for India and Brazil. Both India and Brazil enjoy comparative advantage for labour and resource intensive sectors in the global market. India enjoys comparative advantage in the exports of labour-intensive items such as textiles and scale-intensive items such as chemicals and iron and steel while Brazil enjoys advantage in manufacturing goods such as instruments, sanitary fittings and capital intensive products. Regarding trade intensity, there is a growing trend, as the export intensity index (EII) values for 10-year time period 1995–2004 present an average value of 0.58, the index value which is lower than 1, which means a lower intensity of export trade of India with its partner; however, from 2005 onwards there has been a growth with respect to the export intensity values which were above 1. The highest import intensity index (III) was registered in year 2009 which was 9.095. The III values registered from 1995 to 2011 were greater than 1, showing a great intensity of India’s import trade with Brazil.