Prime Minister Narendra Modi and Brazilian President Lula da Silva, during their recent phone call on August 07, 2025, reiterated their ambitious goal of increasing the annual bilateral trade between the two countries to over $20 billion by 2030, up from the existing $12 billion. This strategic push includes expanding the India-Mercosur Preferential Trade Agreement, which includes Brazil, Argentina, Paraguay and Uruguay.

On this alignment, PSU Connect Media spoke exclusively with Mr. Gaurav Shisodia, Vice-President at Payoneer India, and explained challenges faced by Indian Businesses in cross-border transactions and why fast, simplified, and end-to-end cross-border payment platforms matter when exporting to new countries and trading in unfamiliar currencies.

The Payoneer SMB Barometer Report 2024 reveals that over 45% of Indian SMBs struggle with cross-border payments. Key challenges include volatile forex rates, complex trade compliance, and slow transaction times. Cross-border payment Platforms address these issues by offering a platform that simplifies end-to-end compliance and facilitates seamless settlements. This enables Indian exporters to efficiently manage transactions and mitigate the complexities associated with cross-border trade.

How do the new bilateral trade goals between India and Brazil translate into tangible opportunities for Indian SMBs on the ground?

Indian ecommerce sellers, marketplace sellers, and resellers are accelerating their global expansion at an unprecedented pace, with globalization emerging as the single most critical strategy for sustainable growth in 2025. Over 61% of surveyed Indian businesses now identify technological advancements as key drivers for better global exposure, while more than 83% expect their revenues to increase in the next 12 months through international expansion. (From SMB barometer)

Currently, the US dominates Indian SMB cross-border transactions, accounting for nearly 40% of all international business, followed by Australia, China, and the UK. However, Indian SMBs are strategically diversifying their global footprint, with 20% planning to enter South Asian markets and 19% targeting East Asia and the Pacific over the next five years. Indian SMBs focus on global expansion amidst tech, operational hurdles- both percentages significantly higher than global averages.

India and Brazil have set a new goal to raise two-way trade to US$20 billion in the next five years, and both governments have linked this to an expansion of the India–MERCOSUR trade pact. This matters for small businesses because the agreement already provides tariff concessions on many products, and any expansion will only make Indian goods more competitive in Brazil. Additionally, on the logistics side, India has also eased courier exports: shipments up to Rs 10 lakh can now move under export incentive schemes like Duty Drawback and RoDTEP.

On the demand side, Brazil’s import profile shows clear headroom in categories where Indian SMBs are strong. In 2024, it bought about US$41B of machinery (HS-84), US$12.3B of pharmaceuticals (HS-30), and US$8.12B of motor-vehicle parts (HS-8708), so engineering goods, pharma, and auto components have clear headroom. With India already exporting ~US$6.44B to Brazil, the practical move is to map your SKUs to these HS codes and use the PTA tariff breaks plus the Rs 10-lakh courier window to sharpen pricing and get to market faster.

Which sectors or types of businesses are best positioned to capitalize, particularly with the India–Mercosur focus?

India's export performance presents a clear roadmap for strategic market entry. With merchandise exports reaching $437.42 billion in FY25, India has demonstrated sustained competitiveness across key sectors such as electronic goods, pharmaceuticals, engineering goods, and textiles, while the services exports continue to provide complementary growth drivers.

Brazil represents a validated market opportunity with established demand patterns. India's bilateral trade with Brazil already reached $6.44 billion in 2024, with pharmaceuticals, machinery, and electrical equipment driving substantial volumes. The market depth is significant as Brazil's total imports of motor vehicle parts and accessories alone were well above $8.12 billion in 2024, indicating robust industrial demand that Indian manufacturers are well-positioned to serve.

The following three sectors present immediate scalability advantages:

Pharmaceuticals and Healthcare: Indian companies already hold competitive advantages in generic formulations and API manufacturing, with Brazilian buyers demonstrating consistent procurement patterns for these products.

Industrial Machinery and Electrical Equipment: Brazil's manufacturing base requires ongoing capital equipment upgrades, creating sustained demand for Indian engineering solutions and electrical components.

Automotive Components: The $8+ billion automotive parts import market represents a substantial opportunity, particularly for Indian suppliers with established quality certifications and supply chain capabilities.

The strategic imperative is execution-focused. With the India-Mercosur trade framework providing tariff advantages, the competitive differentiator will be operational excellence, specifically, meeting Brazilian certification requirements, establishing reliable service networks, and demonstrating supply chain resilience. Companies that can rapidly align their go-to-market strategies with these proven import demands will capture disproportionate market share as tariff benefits take effect.

The Payoneer SMB Barometer Report highlights volatile forex rates. What are the biggest risks or hidden costs Indian exporters face when dealing with an unfamiliar currency like the Brazilian Real?

Payoneer’s 2024 SMB Ambitions Barometer shows that 46% of SMBs’ customer base is now international, up from 42% the year before, so the impact of currency swings and hidden costs is only growing. 65% of Indian businesses believe a diverse and global vendor network helps protect against disruptions, demonstrating resilience and agility against external threats. However, more than 45% of the Indian SMBs face challenges in terms of making or receiving cross-border payments. Some of the major challenges include foreign exchange rates, international trade compliance requirements, slow transaction time, etc.

In late 2024, the dollar reached record nominal highs against the Real. For instance, it closed at R$6.08 on December 20 and rose to R$6.73 by December 25. As a result, fluctuations between the day sellers quote a price and the day they receive payment can erode margins if sellers bill or settle in BRL. Simply put, quoting a price in BRL without a strategy could lead to a reduction in profits.

This is where Payoneer comes in. Payoneer’s business-grade features and secure platform expand the ability of global SMBs to access customers, manage suppliers and vendors, operate, and grow across borders with ease, reliability, and confidence. By using Payoneer, customers can receive payments in multiple currencies directly into Payoneer’s virtual receiving accounts, making it easy to receive funds from global marketplaces worldwide and enabling SMBs to be “local” to their customers regardless of where they are. Additionally, Payoneer supports auto-withdrawing money to a local bank account at competitive fees, providing customers with the flexibility to access funds conveniently.

How does Payoneer’s platform simplify the end-to-end compliance process, and why is it more effective than traditional banking channels

Our mission is to connect the world’s underserved businesses to the rising global economy. We achieve this by providing a multi-currency financial stack optimized to help global SMBs manage their financial operations. While SMBs are significant drivers of global commerce, creating local employment and boosting economic activity, they are often underserved by both global and local banks and fintechs when it comes to cross-border transactions. Many legacy banks and even today’s fintechs either lack the capacity or the willingness to address the real challenges faced by SMBs globally. The traditional banking sector remains complex and slow, failing to modernize in a way that truly supports SMBs. On the other hand, most fintechs focus primarily on limited currencies with very limited regional reach, while local banks continue to overlook the cross-border needs of these crucial businesses.

Payoneer solves this problem for the 80 million (and growing) underserved SMBs globally and becomes a vital part of customer businesses by offering:

A scaled platform that is regulated across key markets. Serving customers from 190+ countries and regions, Payoneer has nearly 100 banking and payment service providers, as well as many global marketplace partnerships. We process at scale, with approximately two million active customers, and $80 billion of volume into the Payoneer network in 2024 (as of December 31, 2024).
A localized experience, with a smart routing system that enables global payments cost-effectively and efficiently, including same-day and real-time settlement with high reliability. We also have 100+ customer success managers in 35 countries, speaking over 20 languages.
A time-tested brand. Our 20-year history and track record strengthen the trust our customers place in us to manage approximately $6.6 billion of customer funds as of March 31, 2025, up 11% year-over-year.

Payoneer acts as a one-stop platform, a financial stack that enables and empowers the world’s underserved SMBs to transact, do business, and grow across borders with ease, reliability, and confidence.

With the focus on high-growth markets, what role do platforms like Payoneer play in helping India achieve its broader export ambitions beyond Mercosur?

Cross-border payment platforms like Payoneer help ecommerce sellers, marketplace sellers, SMBs, and exporters turn “interest from abroad” into actual export receipts by removing day-to-day friction and enabling seamless global payments. Buyers can pay using Payoneer in multiple ways, such as debit/credit card, ACH debit via Payoneer’s multi-currency receiving accounts, and funds can be auto withdrawn straight to your local bank account. That matters because India’s exporter base is expanding quickly: the government reports highlight that MSME exports rose from ₹3.95 lakh crore in FY2020-21 to ₹12.39 lakh crore in FY2024-25, and the number of exporting MSMEs climbed from 52,849 to 1,73,350, a much larger pool of firms now selling overseas. At the same time, small businesses globally say international demand is already a big share of their business: Payoneer’s latest study finds SMBs on average have 46% of customers outside their home country, underscoring why simple cross-border payments are essential as you grow into Southeast Asia, the Gulf, Africa, and beyond.

In India, even though SMEs account for 97% of total enterprises, their share in exports is only slightly more than 40% on average. Of 51 million SMEs in India, less than 1 million participate in global trade, according to the Reports of SME World Asia.

Moreover, India’s service export sector continues to experience robust growth, particularly in IT services, e-commerce, and digital marketing, which aligns with Payoneer’s commitment here. SMB customer revenue reached $183 million, growing 18% year-over-year, driven by a 37% increase in B2B SMB revenue and 8% growth in marketplace SMB sales. Revenue excluding interest income grew 16% year-over-year, fueled by 11% volume growth and significant take rate expansion with SMB customers.

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