Products of Doosan Heavy Industries Vietnam Co. Ltd are being prepared to export to Brazil. Firms will try to crack Brazil's domestic market when import taxes are cut later this year. — VNA/VNS Photo Tran Dang Lam

HA NOI (Biz Hub)— Vietnamese businesses will have a major opportunity to crack Brazil's lucrative domestic market when import taxes are cut later this year, according to Viet Nam's trade office in Brazil.

The South American powerhouse is set to cut import rates across 100 industrial products, including steel, petrochemicals, pharmaceuticals, and construction materials.

Whilst tax rates increased last year in an effort to shield local industries from currency fluctuations, industrial import taxes are expected to drop by more than half, from 25 per cent to 8-10 per cent.

The cuts follow strong growth in Brazil's import market by almost 22 per cent in 2012, driven by solid population growth and dramatic increases in spending power.

Firms are beginning to realise the potential of tapping into this huge market, the office said. Vietnamese products have priced well below foreign competitors, enticing Brazilian businesses to ramp up imports and distribution, it said, adding that bilateral trade had seen major growth over the past decade. Two-way trade reached over US$1 billion in the first half of this year, up 31.2 per cent, while Vietnamese exports to Brazil climbed 57.6 per cent, reaching $499.4 million, according to the General Department of Customs.

Despite impressive growth, the market share of Vietnamese exports account for only 0.3 per cent of Brazil's imports.

Experts are advising businesses to accelerate trade promotions to take full advantage of the lower taxes.

This year, the Vietnamese Trade Office in Brazil hosted a range of seminars to promote exchanges and partnerships between members of both business communities.

Trade is expected to reach $2 billion by the year's end, with $1 billion expected to come from Vietnamese exports.

If current trends continue, trade is expected to reach $5 billion during the next five years and $8 billion by 2020.

Viet Nam's major exports to Brazil include seafood, electronics, textiles, steel and machinery. — VNS