In Detail: India and Brazil's Landmark Mining Agreement

India has moved to deepen trade ties with Brazil, signing a pact to expand cooperation in mining and minerals as it seeks to meet rising domestic steel demand and support capacity expansion amid a global race for raw materials.

The agreement was signed in the presence of India's Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva, who was in New Delhi  for a three-day visit.

Brazil is among the world's top producers of iron ore and holds large reserves of minerals critical to steelmaking. This cooperation is expected to improve access to raw materials.

Expanding India’s domestic steelmaking capacity

India currently has a steelmaking capacity of 218 million metric tons and companies are expanding output to meet rising domestic demand driven by infrastructure development and industrialisation.

Closer cooperation is expected to improve India's access to raw materials and technologies needed to sustain long-term growth in its steel sector, an Indian government statement said.

The cooperation will focus on attracting investment in exploration, mining and steel sector infrastructure.

"We are committed to taking bilateral trade much beyond US$20bn in the next five years," said Modi, who added that current trade stands at about US$15bn annually.

Brazil’s leading role in iron ore

The partnership is anchored by Brazil’s position as a global mining giant. In 2025, Brazil's iron ore exports hit an annual record of 416.4 million metric tons, surpassing 400 million tons for the first time in history.

The Brazilian mining company Vale reported its highest output since 2018, reaching 336.1 million metric tons last year. This performance has seen Vale strengthen its position as a dominant global producer, with mining representing approximately 4% of Brazil's GDP.#

The sector's total revenue in 2025 reached R$ 298.8bn, a 10.3% increase compared to 2024.

Technological innovation and digital infrastructure

Beyond raw extraction, the nations will work closely in areas such as technology, innovation, digital public infrastructure, AI and semiconductors.

The MoU provides an institutional framework for processing and recycling technologies for minerals, as well as automation in exploration. "Our nations will also work closely in areas such as technology, innovation, digital public infrastructure, AI, semiconductors and more," said Modi.

This includes the use of artificial intelligence in geoscientific data analysis to enhance exploration processes. Brazil’s Ministry of Mines and Energy and India's Ministry of Steel will lead efforts to integrate these advanced technologies into the steel value chain.

Bilateral trade and local currency settlements

Bilateral trade reached US$15bn for the first time in 2025, marking a growth of 25% over the previous year. President Lula da Silva has advocated for trading in national currencies rather than the US dollar to settle transactions.

"Lula on Thursday advocated for Brazil and India to conduct trade in their own currencies rather than settling transactions in US dollars," according to official reports.

While President da Silva dismissed speculation about a common BRICS currency, he emphasised the need for deeper strategic engagement. He highlighted that India’s prowess in IT and AI creates new opportunities for industrial cooperation.

Securing resilient global steel supply chains

Brazil possesses significant reserves of minerals critical to steelmaking, including manganese, nickel and niobium. The Indian government is seeking new suppliers to curb dependence on certain global markets and to support capacity expansion.

Enhanced cooperation with Brazil is expected to facilitate access to advanced technologies in mineral processing.

This partnership will support efficient preparation of steelmaking inputs and strengthen the resilience of the India–Brazil supply chain. The two leaders also discussed expanding the India-Mercosur preferential trade agreement.

The pact on rare earths is viewed as a major step towards building resilient supply chains for both nations.