India and MERCOSUR Nations In Talks To Expand the Trade Agreement
The preferential trade agreement between India and the MERCOSUR nations is anticipated to expand for closer ties between the regions.
India, along with the MERCOSUR group of Latin American Countries, is participating in critical discussions over expanding their preferential trade agreements. The MERCOSUR trading bloc comprises Brazil, Argentina, Paraguay, and Uruguay.
The PTA, signed in 2004 by India and MERCOSUR has allowed New Delhi in forging closer economic ties with one of the largest trade blocs in the world. The combined GDP of the four MERCOSUR nations, valued in 2020, extends to almost 1.9 trillion, per a total market of nearly 295 million people.
The deal elucidates providing regularized tariff concessions ranging up to 10-100 percent on 450 and 452 tariff lines. Both parties in the deal are making feasible discussions to expand the number of goods included in the engagement. The initiations are yet in their early stages, as the queries sent to the foreign ministries of India and Brazil are yet to be answered.
India is currently making a major diplomatic and economic push toward Latin America, and the trade has shot up from two billion USD in 2000 to over 50 billion USD in 2023. With a keen and closer economic relationship of India with its key countries like Mexico, Brazil, and Argentina, India’s automotive sector has managed to emerge as a big beneficiary considering LatAM as its largest potential export market.
Indian external affairs minister, S Jaishankar visited Mexico, Argentina, Paraguay, and Brazil in 2021, and is anticipated to pay another vision to the arenas in 2023. New Delhi has already expanded its digital footprint in the region, setting up new missions in Paraguay and the Dominican Republic arena. Consequently, foreign ministers of Mexico, Brazil, and Argentina visited New Delhi for the G20 Foreign Ministers Meeting briefly.
The primary agenda of these nations aim at establishing closer economic ties with India. The region faced a major setback since the pandemic scenario, where, initiating its recovery proffers induced benefits in the arena in increased investment and collaboration, established with India.
The economy in the arena aims at attracting Indian investments in varied key sectors like pharmaceuticals, The Panama foreign minister, Jamaica Tewaney Mencomo stated that attracting these businesses can likely act as a gateway to large and established markets in North and South America.
Further, energy investments are of interest to both horizons, say renewable technologies like green hydrogen emerging as an area of interest to Panama. Meanwhile, Guyana sought out Indian expertise to develop its newly discovered oil reserves in the region.