India and Brazil Jointly to Expand the India-Mercosur Preferential Trade Agreement

According to an official statement, India and Brazil have joined forces to expand the India-Mercosur Preferential Trade Agreement (PTA), with the goal of strengthening their economic ties. Mercosur, a Latin American trading bloc comprised of Brazil, Argentina, Uruguay, and Paraguay, was at the centre of discussions on the sidelines of the G20 Summit between Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva.

Both leaders expressed their satisfaction with the growing trade between India and Mercosur and committed to collaborating on the expansion of the India-Mercosur PTA during Brazil's Mercosur Presidency. "Expressing satisfaction over the growing trade between India and Mercosur, both leaders agreed to work together for the expansion of India-Mercosur PTA during Brazil's Mercosur Presidency, to realise the full potential of this economic partnership," a joint statement issued after the meeting said.

Additionally, the two nations welcomed the establishment of the India-Brazil Business Forum as a dedicated platform for private-sector collaboration. Furthermore, it was noted that the domestic procedures required for the India-Brazil Social Security Agreement to come into effect have been completed. The India-Mercosur Preferential Trade Agreement (PTA) has been in effect since June 1, 2009. These agreements involve the reduction or elimination of customs duties on specific goods agreed upon by the participating countries. Expanding the agreement would entail increasing the number of goods covered and establishing negotiation norms to boost trade in services and investment.

The PTA currently covers a limited range of products, with only 450 tariff lines. India's exports to Latin America increased to $17.7 billion in the fiscal year 2022-23, up from $15 billion the previous year. Imports increased as well, rising to $22 billion in the most recent fiscal year from $21.74 billion in 2021-22.