India, Mercosur Deepen Economic Ties
A preferential trading agreement between India and the Mercosur countries Argentina, Brazil, Paraguay and Uruguay is set to take effect on 1 June. The pact, which will lower tariffs on a wide range of goods, is intended to serve as a stepping stone toward the establishment of a full-fledged free trade area among the signatories.
Under the terms of the deal, India will give preferential access to 450 goods from Mercosur countries, including chemicals, petrochemicals and electronic equipment. In exchange, Mercosur will open its markets to some 452 Indian products, including air conditioning systems, refrigerators, silk and glass.
Trade between India and Mercosur, whose four member countries are home to 200 million people, totalled US$3.9 billion in 2008.
In a recent meeting organised by India’s Association of Chambers of Commerce and Industry, high-level officials from the Mercosur region set out the main strengths that their countries can offer India in trade matters. The Argentinean representative stressed that its market is the third-largest in Latin America, after Brazil and Mexico. Uruguay called attention to its focus transparency and predictability in its government policies, while Paraguay emphasised the possibility of synergies with India in the field of agribusiness.
“Very soon we will have to sit down again to look into the possibility of widening the scope of the agreement to give rise to a new wave of economic and business cooperation with India,” Jose Carlos Fonseca, the Minister-Counsellor of Brazil in India, told the meeting, according to India’s Financial Express.
India and Mercosur struck a framework agreement in June 2003; the PTA was subsequently signed in January 2004.
The trade deal is India’s second major agreement in Latin America. New Delhi signed a similar PTA with Chile in 2005. Earlier this month, Santiago indicated that the two countries will soon begin negotiations to expand the deal into a broader free trade agreement.
ICTSD reporting; “India-Mercosur pact to boost bilateral trade,” THE FINANCIAL EXPRESS, 13 May 2009; “Chile to sign trade agreement with India,” THE ECONOMIC TIMES, 11 May 2009.