NEW DELHI — Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva sealed a pact on rare earths and critical minerals Tuesday, aiming to bolster supply chains amid global dependencies on China.

The memorandum of understanding emerged from high-level discussions at Hyderabad House. Modi described it as a ‘major step’ that strengthens defence cooperation and reflects deep mutual trust. Brazil holds the world’s second-largest reserves of these minerals, essential for electric vehicles, solar panels and military hardware.

India seeks to diversify sources. Officials said the country wants to cut reliance on China, which dominates global rare earth processing. New Delhi plans to ramp up domestic production while scouting partners like Brazil.

Lula called the agreement a key move for renewable energy collaboration and critical mineral security. He arrived in India Monday for a two-day visit, his first since Brazil joined the G20 under New Delhi’s presidency in 2023.

Nine other pacts rounded out the meetings. They cover digital trade, public health, entrepreneurship and agricultural research. Both sides set a goal of more than $20 billion in bilateral trade within five years, up from $15 billion last fiscal year.

Brazilian Foreign Ministry officials noted the rare earths deal builds on earlier energy talks. India imported $1.2 billion worth of critical minerals in 2023, mostly from China. The new framework allows joint exploration and processing ventures.

Modi hosted a banquet for Lula Tuesday evening. The leaders also discussed global issues, including Ukraine and climate finance. Trade between the two BRICS partners has grown 20% annually since 2020, driven by commodities and pharmaceuticals.

India’s commerce ministry reported Brazil as its 25th largest trading partner. Key exports to Brazil include refined petroleum and generic drugs. Imports feature crude oil, gold and now potentially rare earths.

The pact comes as the U.S. and EU push allies to secure non-Chinese supplies. A similar India-Australia deal in 2022 opened rare earth processing in Tamil Nadu. Experts say Brazil’s niobium and graphite deposits could fill Indian needs for batteries and semiconductors.

Lula departs Wednesday. His office said the visit cements strategic ties, with follow-up ministerial meetings planned for Rio de Janeiro in 2025.