Unlocking success
How SVP can support seamless market entry in Brazil and India
What started towards the end of 2006 under the acronym BRIC, representing Brazil, Russia, India, and China, has since grown into the largest alternative alliance to the G7 and especially the United States.
Over time, the BRIC group has grown to include nine members, with the addition of, first, South Africa in 2010 forming BRICS and later on Ethiopia, Egypt, Iran, and the UAE in 2024 forming BRICS+. This broader coalition now represents more than 45 percent of the world’s population. By 2024, the collective contribution of BRICS+ to global GDP, when adjusted for purchasing power, has reached more than 36,7 percent. In comparison, the G7 countries account for about 11 percent of the world’s population, generating 29.6 percent of global GDP in PPP.
Diverging Interests
Despite its growing influence, the BRIC nations lack a unified policy approach. Their collaboration is primarily driven by a shared opposition to a US-led unipolar world order, yet they often pursue vastly different—and at times conflicting—economic and geopolitical policies.
As the economic trajectories and strategic priorities of member states continue to diverge, finding mutual ground may become increasingly difficult.
The group has taken strides to provide alternative economic instruments for member countries, such as
- the multilateral New Development Bank (NDB),
- the launch of interbank systems so that members can pay in their own currencies, bypassing the dollar and SWIFT,
- new mechanisms like central bank digital currencies, leveraging of cryptocurrencies,
- and many others.
However, many of these initiatives have so far not been (fully) realized.
What Lies Ahead?
Will the BRIC alliance falter, or will it expand even further? During the 2023 BRICS summit, reports indicated that over 40 additional countries had expressed an interest in joining the group. More recently, during the 2024 BRICS summit however, Turkey and Venezuela were refused to become members based on the veto of at least one of the existing members.
During the recent summit, BRICS leaders reaffirmed their commitment to strengthening financial cooperation, and promoting multilateral cooperation for global development and security, urging adherence to the UN Charter’s principles to address challenges like unilateral sanctions and promote sustainable development.
However, the long-term impact of Russia’s invasion of Ukraine and the rising tensions between China and Taiwan on the bloc’s future also remains unclear. Other military conflicts, e.g. between Israel and its neighbours, and growing international tensions potentially ending up in a trade war, are further destabilizing world economies and global efforts for peace.
Given these developments, we will take a closer look at two nations that have so far been overshadowed by Russia and China, exploring their potential appeal for German and European businesses.
India as the driving force of the global economy
India currently holds the title of the world’s fastest-growing large economy, outstripping other emerging and developing Asian nations in terms of economic progress. The country has become a global leader in various industries, including information technology, pharmaceuticals, space exploration, and biotechnology.
The primary driver of India’s economic growth and rising prosperity is its service sector, which accounts for nearly 50 percent of the GDP, although it provides only around one-third of the total employment.
However, the June 2024 parliamentary elections created a new and complex political scenario for India. Prime Minister Narendra Modi, unexpectedly losing his absolute majority, is now compelled to balance the interests of various parties in a coalition to maintain government stability for the full term.
His two main coalition partners are regarded as tough negotiators and are expected to demand significant concessions in exchange for their support.
In his third term, Modi faces the challenge of ensuring that economic growth benefits all segments of society. One priority will be enhancing India’s attractiveness as a production hub to address the country’s job shortages.
Foreign investors and companies looking to expand into India will be pivotal in this effort.
In May 2022, India and Germany deepened their partnership with the launch of the “Partnership for Green and Sustainable Development,” which aims to strengthen bilateral cooperation and involve multiple stakeholders from academia, business, and civil society.
Brazil’s Path to Stable Growth
Brazil plays a significant role in international peace and security, global trade, and especially in forest and climate protection. The country also holds a prominent position within Latin America.
Over the long term, Brazil’s economic potential remains considerable, as it is rich in natural resources, boasts a diversified industrial base, and has a well-educated workforce. For the fifth consecutive year, Brazil’s economic growth has outperformed initial forecasts from financial institutions.
This success is largely attributed to economic reforms from previous governments, including labour market and pension reforms, and privatization initiatives that have paved the way for infrastructure expansion.
Under President Lula da Silva, tax reform is now advancing, laying the groundwork for continued growth. This reform aims to streamline bureaucracy and encourage green reindustrialization.
The new industrial policy also supports this objective, while interest rate cuts and investment programs are particularly stimulating infrastructure development.
Germany ranks as Brazil’s third most important trading partner after China and the USA. While German products are highly regarded, they often struggle to compete with more affordable options from East Asia in Brazil’s price-sensitive market. Nevertheless, European manufacturers can differentiate themselves with reliable local services. Opportunities for engagement in Brazil lie in renewable energy, energy efficiency, sustainable urban development, and Just Transition initiatives.
International Services offered by SVP
If you are looking for country-specific market studies or have a particular need for deeper insights, whether through PESTEL analyses to assess market attractiveness or more targeted studies focused on specific sectors, industries, or applications to support your business decisions, please feel free to reach out to us. We would be happy to offer our advice and assistance.
In addition to widely available English-language resources, our analyses leverage the specialized knowledge of our network partners (please find two examples below), who provide access to local expertise and insights through multiple channels when necessary.
In sum, we are capable of providing our services on a global scale, thanks to the support of one or more partners in major economies worldwide. This extensive network allows us to cater to diverse markets and meet the needs of clients across the globe.
Teresa – Network partner in Portugal
“In certain situations, language and cultural barriers can restrict access to valuable information. Knowing a culture and being fluent in the language not only allows for the use of additional secondary sources but also enables direct interaction with market participants and experts. This means I can address a wide range of questions about Brazil while operating from Portugal. Moreover, I am also able to offer support on a global scale, such as assisting with the preparation of due diligence reviews.”
Mira – Network Partner in India
“As a long-term partner of SVP my key role was that of an interface and I used my expertise to often suggest alternative strategies with a higher likelihood of success in the Indian market. Proficiency in the local language along with local presence and a deep understanding of the nuances in a multicultural country with diverse religions and languages like India still play an essential role in this effort. Now that I am preparing for retirement, I’m proud to hand over to the next generation of skilled market researchers that will bring additional tools and methods with them.”
Subra – Network partner in India
“With over 30 years of experience in business research and consulting – particularly in the chemical, biotech, and pharmaceutical industries – I am pleased to support European clients navigating business in India and beyond, including the MEA region and other South Asian markets. This includes services such as business research and analytics, technology and investment research, consumer insights, and cross-border expansion.”
Anja Fürbach, Market Intelligence Senior Expert
Sources:
- Worldbank, OECD, IMF, GTAI, BMZ, Destatis, press
- https://www.destatis.de/
- https://www.freiheit.org/
- https://www.gtai.de/
- https://www.imd.org/
- https://www.imf.org/
- https://data.worldbank.org/
- https://de.wikipedia.org/
- https://www.dandc.eu/
- https://www.bmz.de/
- Image source: stock.adobe.com, bizvector
