(Recasts with speech)

By Surojit Gupta

NEW DELHI, June 4 (Reuters) - India and Brazil, two of the world's emerging market giants, sought on Monday to forge a strategic relationship between their distant nations and enhance their role as a strong voice of the developing world.

The two fast-growing economies have come closer in recent years and built a strong relationship based on common positions on key issues such as global trade talks and expansion of the U.N. Security Council.

Brazilian President Luiz Inacio Lula da Silva, who began a three-day visit to India on Sunday, his second in a little over three years, said he wanted to raise those ties to a higher level.

"We are making our relationship very dynamic, strengthening economic and political alliances into a strategic relationship," he told business leaders from the two countries.

"We must diversify the components of trade, now restricted to less value-added items," he said, adding that Brazil could offer farm technology to India while New Delhi could offer its expertise in the pharmaceutical sector.

The two countries are also working on a common position to address climate change ahead of the G8 summit in Germany this week -- which both are attending -- and pushed for India's use of bio-fuels, an area in which Brazil is a world leader.

"Ethanol, bio-fuels are more than ever emerging as fuel alternatives," Lula said, adding that they helped reduce pollution and dependence on fossil fuels and provided jobs to rural farmers.

Trade and investment are high on the agenda of Lula's trip and his delegation includes some 100 businessmen.

DISTANCES BLURRING

Trade between India and Brazil has surged and touched $2.4 billion in 2006. They have also increased investments in each other's fast-growing economies.

Indian firms have focused on investment and joint ventures in Brazil's pharmaceutical, IT and energy sectors while Brazilian companies have targeted India's infrastructure, food processing and energy sectors.

The two countries aim to quadruple trade to $10 billion by 2010 and Lula said this goal could be achieved.

But ahead of the visit, Brazilian officials had complained about New Delhi's hesitation to further open its markets to farm imports and pointed at a fall in Brazilian exports to India by 15 percent to $937 million last year.

Indian businessmen said they were pushing New Delhi to facilitate easier trade between the two countries and were optimistic about progress.

"Our two countries have already emerged as the strong voice of developing nations in trade negotiations," Indian Trade Minister Kamal Nath said.

"We in India hope that the positive signals given to the business community of both sides will further strengthen our relations, leading to further increase in trade and investments between India and Brazil."

Separately, Brazilian energy giant Petrobras offered a 25-30 percent stake to India's state-run Oil and Natural Gas Corp. in three exploration blocks.

In return, ONGC offered a 15-40 percent stake in its three deep-water blocks on India's east coast, and a preliminary agreement on the deals was expected to be signed shortly.

The two countries also signed seven agreements, including on cooperation in space, customs and education.

(Additional reporting by Nidhi Verma)

AlertNet news is provided by