India is looking to expand its existing preferential trade agreement (PTA) with the Mercosur bloc comprising Brazil, Argentina, Bolivia, Paraguay and Uruguay for now as a full fledged free trade agreement (FTA) continues to be delayed due to a lack of consensus between the five South American countries, government officials privy to the matter said on October 16.
"Currently, the PTA with the Mercosur trade bloc covers about 450 tariff lines. Talks are on to expand the PTA further to cover more items," said a government official.
Expanding the scope of the Mercosur PTA has been India's long-standing demand. India is keen on improved access to agricultural products, such as soybeans, poultry, and sugar, from Mercosur countries. It also hopes to secure lower tariffs and preferential treatment in industrial goods, pharmaceuticals, and textiles, apart from broadening trade in services.
When asked whether discussions were held on initiating an FTA with the trade bloc, the official said India is keen, but consensus from all member countries of Mercosur is delaying the process. "The FTA may take time due to consensus building between the five partner countries of the bloc," the official said.
Brazil's Vice-President and Minister of Development, Industry, Trade and Services Geraldo Alckmin is on an official visit to India from October 15-17 and is accompanied by his Cabinet ministers, senior officials and a business delegation.
On July 7, Moneycontrol highlighted how India is reaching out to the South American region with Prime Minister Narendra Modi visiting Argentina and Brazil. The South American continent is rich in natural resources such as oil, critical minerals, and agricultural products.
On October 16, he held the inaugural 'trade ministerial review meeting' with his Indian counterpart Piyush Goyal. During the meeting India and Brazil agreed to deepen bilateral trade and investment ties across diverse sectors including energy, agriculture and technology.
“Reviewed the full spectrum of bilateral trade ties while reaffirming our shared commitment to deepen co-operation and investment ties across diverse sectors, including energy, healthcare, agriculture, and technology,” Goyal said after the meeting.
“Shared democratic values and a common vision for inclusive and sustainable growth underpin our partnership,” the minister added.
Goyal further stated that the two countries on the World Food Day, were “celebrating the India–Brazil partnership and the contribution of our farmers that continues to strengthen global food security."
According to a statement issued by the Ministry of External Affairs (MEA), Brazil is the largest trade partner of India in South America. "During the recent State visit of Prime Minister Modi to Brazil, the leaders agreed to establish a Ministerial-level Review Mechanism to foster our trade and investment, and set a bilateral trade target of $20 billion in the next five years," read the MEA's statement.
Speaking at the India–Brazil Business Dialogue held on October 16 in New Delhi, Goyal stated India's economic growth story is focused on three pillars - strong macroeconomic fundamentals, modern infrastructure, and improved quality of life.
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