📰Brazil Wants to Triple Indian Trade

Three stories on Indian markets that you can't miss.

July 09, 2025

Good afternoon,

Welcome to the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

  • Brazil wants to triple trade with India,

  • SEBI to loosen credit rating restrictions,

  • and India’s government is stepping up pressure on domestic coal producers to improve fuel quality

Then, we close with Gupshup, a round-up of the most important headlines.

Have a question you want us to answer? Fill out this form, and you could be featured in our newsletter.

—Shreyas, [email protected]

Market Update.

India-Brazil Trade to Triple?

Brazilian President Luiz Inacio Lula da Silva has set an ambitious goal to triple trade flows with India “in the short term,” aiming to build on the $12 billion (₹1 trillion) exchanged last year as both countries look to unlock more South-South economic potential. The comments came during Indian Prime Minister Narendra Modi’s state visit to Brasilia, where both leaders signaled a renewed push to remove barriers and deepen commercial ties.

Lula said that broadening the preferential trade agreement between India and the Mercosur bloc, which includes Brazil, Argentina, Uruguay, and Paraguay, could help lower tariff and non-tariff hurdles that have historically constrained bilateral trade. For India, this could create fresh opportunities for exporters in sectors like pharma, machinery, and IT services, while giving Brazil more access to India’s vast consumer market for commodities and aircraft.

Brazilian planemaker Embraer, for instance, sees India’s fast-growing aviation sector as fertile ground for expansion and is seeking new partnerships with local companies to boost its footprint.

Strategically, closer Brazil–India trade ties fit squarely into both nations’ efforts to diversify supply chains and hedge against developed-market volatility. For India, deeper engagement with Latin America complements its broader pivot to new markets and aligns with its BRICS agenda to rebalance global trade flows. With both sides signaling clear political will, an expanded deal with Mercosur could mark a tangible step toward a more resilient, multi-polar trade architecture that supports their longer-term growth ambitions.

India Wants to Loosen Credit Rating Restrictions.

India’s market regulator SEBI is weighing a move to allow credit rating agencies to expand their scope beyond instruments it directly regulates, a shift that could add depth to the country’s evolving credit ecosystem. In a consultation paper released Wednesday, SEBI proposed that agencies could rate financial instruments overseen by other regulators, including unlisted securities and products outside traditional capital markets.

Under the draft plan, any agency wishing to rate such non-SEBI instruments would need to create a separate business unit within six months and maintain strict operational independence from its SEBI-regulated ratings operations. The move aims to prevent conflicts of interest and ensure credibility as agencies diversify revenue streams. Importantly, ratings for these instruments must be fee-based, a push to curb any potential ‘rating shopping’ or free advisory overlap.

The proposal, under new SEBI Chairman Tuhin Kanta Pandey, reflects a more pragmatic regulatory stance and comes amid calls from industry stakeholders for clearer avenues to assess risk in India’s growing pool of unlisted and alternative credit products.

For India’s broader macro landscape, expanding the role of rating agencies could support financial deepening, improve transparency in private debt and structured finance, and help investors better price risk in segments that have historically lacked standardized benchmarks. If implemented thoughtfully, it may strengthen investor confidence and fuel demand for more sophisticated credit instruments, a key pillar as India pushes to channel more household savings into productive long-term capital.

India Cracks Down on Poor Coal Quality.

India’s government is stepping up pressure on domestic coal producers to improve fuel quality, responding to mounting complaints from the power sector about stone-tainted, low-grade shipments that raise costs and strain the country’s power supply chain. The power ministry has proposed tougher measures, including mandatory testing of coal quality upon arrival at plants and more rigorous sampling from deeper layers of stockpiles, a practice meant to catch discrepancies that surface checks often miss.

The push marks a significant shift for Coal India Ltd. and other suppliers, who have long billed customers based on quality assessments made at the mine site, where discrepancies often go unchecked once the coal is loaded. When plants receive coal with lower calorific value or unwanted debris like mud and stones, they must burn more fuel to generate the same power, driving up costs and increasing pressure on India’s already stretched railway network.

The stakes are high for a power sector that still depends on coal for over 70 percent of its generation capacity. Poor coal quality not only erodes profit margins for utilities but also passes hidden costs onto consumers in the form of higher tariffs and unreliable supply.

“India is turning from a seller’s market into a buyer’s market for coal,” said Rupesh Sankhe of Elara Capital, warning producers that customer scrutiny will only intensify. For India’s broader energy security and inflation outlook, more accountability in the coal supply chain could help reduce transport bottlenecks, cut wastage, and ease the burden on households already facing rising utility bills.

Want to reach out audience?

Reach out to [email protected] to see your ad here.

Gupshup.

Macro

Equities

Alts

Policy

See you Thursday.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.