Brazil is the largest economy in the Latin America and Caribbean Region. (GDP in US$M- PPP terms). It is a federation comprising 26 states and a Federal District. In 2007, the United Nations Conference on Trade and Development (UNCTAD) ranked Brazil as the fifth -most attractive destination for Foreign Direct Investment (FDI).

Brazil is a highly diversified and industrialized economy and a world leader in the agro-industry. The nation is bestowed with extensive natural resources, and has a huge population with a young, highly educated middle class and an innovative & entrepreneurial private sector.

As a founding member of the MERCOSUR, Brazil is a party to a number of Free Trade Agreements and Framework Agreements entered into by the MERCOSUR.

Brazil, as everyone else, was affected by the crisis. But it was spared from some of its worst effects. To a great extent, this was due to the fact that it had diversified trading partners, invested in the internal market by re-distributing income and promoted the expansion of infrastructure. In recent years, Brazil has achieved strong growth with low inflation, through the continued implementation of sound macroeconomic policies. The key to Brazil’s successful economic performance has been a policy framework, which rests importantly on fiscal responsibility, income distribution and on an inflation-targeting regime.

According to the Foreign Trade Association of Brazil, exports are likely to fall in the year 2009 to USD 163 Billion from USD 198 Billion in 2008. The government’s Institute of Applied Economic Research, in its quarterly report on the economy forecasted that the worst of Brazil’s short-lived crisis is over, the economy will grow 2 percent in 2009 and the labor and stock markets could start improving in the third quarter.

•   The bilateral trade between India and Brazil has almost trebled over the last three years to $ 3.12 billion      in 2007-08 and has already reached $ 3.5 billion within the first nine months of this year (2008-09).

•   It is expected that total trade between the two countries in 2010 may be in the vicinity of $ 5.5-6 billion.

•   Many Indian Pharma companies and IT firms have already opened up their offices/production facilities      in Brazil. Similarly, Aviation Company and other companies from Brazil also have already invested in      India.