India and Brazil Collaborate to Enhance India-Mercosur PTA

11 Sep, 2023

India and Brazil Collaborate to Enhance India-Mercosur PTA

In a recent India-Brazil bilateral meeting, the focus was squarely on Mercosur, the influential Latin American trading bloc that comprises Brazil, Argentina, Uruguay, and Paraguay. The leaders of India and Brazil came together to fortify their economic ties by expanding the India-Mercosur Preferential Trade Agreement (PTA), marking a significant step in their collaboration.

This pivotal development took center stage during a meeting held on the sidelines of the G20 Summit, where Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva engaged in constructive discussions regarding Mercosur's role in their economic relations.

Both leaders expressed their contentment with the burgeoning trade between India and Mercosur and conveyed their shared commitment to the expansion of the India-Mercosur PTA, particularly during Brazil's tenure as the Mercosur Presidency.

A joint statement issued following the meeting underscored their determination: "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 realize the full potential of this economic partnership."

Additionally, India and Brazil celebrated the establishment of the India-Brazil Business Forum, which serves as a dedicated platform for fostering collaboration within the private sector. This forum is expected to play a vital role in strengthening business ties and driving economic growth between the two nations.

Furthermore, the leaders acknowledged that all domestic procedures required for the India-Brazil Social Security Agreement to become effective have been successfully completed, contributing to the comprehensive framework of their bilateral cooperation.

The India-Mercosur Preferential Trade Agreement (PTA) has been in operation since June 1, 2009. These agreements revolve around the reduction or elimination of customs duties on specific goods as mutually agreed upon by the participating countries. Expanding the scope of this agreement would entail broadening the range of covered goods and establishing negotiation protocols to facilitate trade in services and investment.

At present, the PTA encompasses a limited array of products, encompassing only 450 tariff lines. Nevertheless, there is significant room for growth and diversification in trade relations between India and Mercosur.

India's exports to Latin America witnessed a notable increase, reaching $17.7 billion during the fiscal year 2022-23, compared to $15 billion in the previous year. Imports also registered an uptick, rising to $22 billion in the last fiscal year from $21.74 billion in 2021-22.

The bilateral trade partnership between India and Brazil has experienced substantial growth, with the fiscal year 2022-23 recording a trade volume of $16.6 billion, a notable rise from $12.2 billion in 2021-22.

In conclusion, the collaborative efforts of India and Brazil to expand the India-Mercosur PTA signify their commitment to fostering economic growth and enhancing trade relations, ultimately benefitting both nations and strengthening their presence on the global stage.