PORTO ALEGRE, Brazil -- With taxes and permit requirements hurting sales at home, Brazilian handgun manufacturers are increasing exports, making their country the leading foreign supplier of handguns to the United States.

"The U.S. is now our largest market," said Carlos Alberto Murgel, president of Brazil's largest handgun manufacturer, Forjas Taurus S. A.

Taurus now accounts for about 10 percent of all handguns sold in the United States.

With highly efficient assembly lines in this southern city, Brazil's largest handgun manufacturers feed U.S. demand for reliable, inexpensive guns. The U.S. market receives about 75 percent of Taurus exports and about one half of the production of Brazil's second-largest handgun maker, Amadeo Rossi S. A.

According to one recent survey, Brazil exports 775,000 handguns a year -- three times the number sold annually in this country of 160 million people.

The spread of Brazilian-made handguns was underscored in April when Mexican police officials identified a .38-caliber Taurus revolver as the weapon used to kill Mexico's leading presidential candidate, Luis Donaldo Colosio.

The gun trail passes through a California gun shop to a Porto Alegre assembly line.

Benefiting from a recent $20 million investment in new machinery, Taurus assembly lines churned out almost half a million handguns last year.

Of these, about 230,000 went to the United States.

Rossi, the only other Brazilian handgun exporter, has 3 percent of the U.S. market.

Last year, 80 percent of Taurus' $85 million in sales were to overseas markets.