On October 13, the Brazilian government took three important steps in its strategy to deepen economic ties with India — the world’s fifth-largest economy and one of the most important poles of a Eurasia, that is gradually regaining its central place in international relations.

The potential that India represents for Brazil and its companies is evident: as a market — with the world’s largest population, of 1.5 billion people — as both a destination and a source of investment, as a partner in knowledge and technology, and certainly as a partner within the BRICS framework.

The first step has a limited impact, as it consisted of a communication by the President to Congress requesting that it evaluate the approval of an agreement between the two countries regarding the exchange and protection of classified information.

The other two steps, more relevant to economic relations, were the presidential decrees that enacted two treaties in Brazil: one on investments and the other on taxation.

The first is the Agreement on Cooperation and Facilitation of Investments between the Federative Republic of Brazil and the Republic of India, which had been signed in New Delhi on January 25, 2020, and was only approved by the National Congress in September of this year.

This agreement follows the parameters that Brazil has preferred and that distinguish the country’s investment facilitation and promotion agreements from the traditional Bilateral Investment Treaty (BIT) models, which Brazil had historically refused to sign. Among the specific features of the Brazilian model are its emphasis on state-to-state relations, including in cases of disputes, and its rejection of international investor–state arbitration.

Like Brazil, India is not a party to the Washington Convention, which established and governs the operation of the International Centre for Settlement of Investment Disputes (ICSID), within the World Bank system. Likewise, India has signed relatively few investments protection agreements, and appears to do so mainly with countries where investment flows are more balanced — that is, not from the position of a mere importer of foreign capital.

India holds an important position among Brazil’s trading partners and among the countries of origin of foreign direct investment (FDI) flowing into Brazil. However, Brazil has a consistent trade deficit with India and invests far less in India than India does in Brazil.

In all respects, the potential is enormous.

The second treaty enacted on the same date is a Protocol Amending the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income between the Government of the Federative Republic of Brazil and the Government of the Republic of India, which had been signed in Brasília on August 24, 2022, and was also approved by Congress in September 2025.

The amended Convention had been in force between the two countries since 1998.

The new instrument seeks to provide greater clarity on the rules governing the taxation of investments and to curb abusive practices of international tax planning. It covers income tax in both countries and, in Brazil’s case, also the Social Contribution on Net Profit (CSLL).

To this end, the Protocol defines criteria for residence and permanent establishment, sets maximum withholding tax rates on cross-border income such as dividends, interest, royalties, technical services, and capital gains, and allows for tax credits for taxes paid in the other country.

The Protocol enters into force for Brazil on October 18, 2025, and will apply to income sourced from the following calendar year onward.

Double taxation agreements are fundamental instruments for promoting foreign investment, and it is significant that this protocol comes into effect at the same time that Brazil incorporates one of the few Investment Cooperation and Facilitation Agreements it has signed — and with such a strategic partner.