India, Brazil agree to expand scope of existing trade pact between India-Mercosur bloc

New Delhi, Oct 16 (PTI) India and Brazil on Thursday agreed to expand the scope of existing preferential trade pact between New Delhi and four South American nation bloc Mercosur to boost economic ties.

Mercosur is a trading bloc in Latin America, comprising Brazil, Argentina, Uruguay and Paraguay.

The issue was discussed during a meeting between the visiting Brazilian Vice President Geraldo Alckmin and Commerce and Industry Minister Piyush Goyal here.

According to the commerce ministry statement, they agreed to set up a technical dialogue between India and Mercosur, including holding of a meeting of the Joint Administration Committee created under a provision of the preferential trade agreement (PTA) at the earliest mutually convenient date, with a view to defining the scope of the expansion.

They agreed that "parties should endeavour to conclude the negotiations within one year from the launch of negotiations", it said.

The India-Mercosur preferential trade agreement (PTA) came into effect on June 1, 2009. This PTA has limited coverage and contains only 450 tariff lines or products. Both sides are looking at expanding the scope of this pact to a full-fledged agreement.

The two sides also agreed that "the expansion of the agreement should be substantial, aiming for a significant share of bilateral trade to benefit from tariff preferences; and the expansion ...should cover both tariff and non-tariff issues related to trade and economic partnership", it added.

The active participation of the private sector and other stakeholders to support the negotiation process should be promoted, it said.

The Brazilian side indicated that it will work in a coordinated manner with its Mercosur partners towards a substantial, swift, and mutually beneficial deepening of the agreement.

Brazil is the largest trading partner of India in the Latin American and Caribbean region. During 2024-25, the bilateral merchandise trade stood at USD 12.19 billion. There is a target to increase it to USD 20 billion over the next five years.

Meanwhile, talking to reporters earlier in the day, Goyal said he has discussed with Brazil to expand preferential trade agreement from its current level so that "we can" in the future penetrate the South American market in a bigger way.

Speaking at an event, Alckmin expressed confidence that the USD 20 billion trade target will be achieved.

It was USD 12 billion in 2024.

He also said that the Double Taxation Avoidance Agreement with India will help create a predictable and safer business environment.

"We are ready to launch a digital partnership ...towards artificial intelligence... high performance computing," he added. PTI RR HVA