Brazil and India have signed a new agreement to deepen cooperation on rare earths and critical minerals, as both countries seek to strengthen supply chains and reduce reliance on trading partners.
The non-binding memorandum of understanding, sealed Saturday (February 21) during Brazilian President Luiz Inácio Lula da Silva’s state visit to India, establishes a framework for collaboration on reciprocal investment, exploration, and mining.
“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,” Lula told journalists.
Rare earth elements are essential inputs for a range of advanced technologies, including smartphones, electric vehicles, solar panels and jet engines. Brazil holds the world’s second-largest reserves of rare earth minerals, giving it strategic importance as governments look to diversify supply chains.
Despite this, China still maintains roughly 70 percent of global rare earth mining and an even stronger position in processing. Countries across the Global South and industrialized economies alike have stepped up efforts to secure alternative sources of supply.
India, like Brazil, is a founding member of the expanded BRICS+ bloc of developing nations, and both governments have emphasized the need to build stronger South-South partnerships.
Brazil’s push to elevate rare earths in its diplomatic agenda gained momentum last year amid tensions with the US. Last year, US President Donald Trump imposed a 50 percent tariff on Brazilian exports in connection with the trial of former President Jair Bolsonaro, an ally of Trump.
The US later removed most of the tariffs and lifted sanctions imposed on the judge overseeing the case.
The Brazil-India accord also continues an ongoing global scramble for critical minerals.
Since last year, the US has signed agreements with Japan and Australia aimed at securing supplies of rare earths, lithium, cobalt, and nickel, with an emphasis on building processing capacity outside China.
For Brazil, the deal with India could serve as a testing ground ahead of potential negotiations with larger powers. Lula is expected to visit Washington in the coming months.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.