Commerce and Industry Minister Piyush Goyal and Uruguay’s Foreign Affairs Minister Mario Lubetkin announced the launch of negotiations to expand the preferential trade agreement (PTA) between India and the South American trade bloc MERCOSUR.
The two sides have agreed to expand the existing agreement to cover areas of mutual interest, with the aim of deepening economic ties and creating greater opportunities for businesses, the Ministry of Commerce and Industry said.
India and MERCOSUR are currently finalising the terms of reference (ToR), which will define the scope and structure of the expanded agreement.
MERCOSUR comprises Argentina, Brazil, Paraguay, Uruguay, Venezuela and Bolivia, although Venezuela has been suspended from the bloc since 2016. India has had a PTA with MERCOSUR since June 2009. The existing agreement covers around 450 tariff lines from India and 452 from MERCOSUR, with tariff concessions ranging from 10% to 100%.
Experts said the current PTA has helped increase bilateral trade since 2009, but its coverage remains limited, particularly as it does not include services. Indian exporters also face high tariff barriers, logistics challenges, regulatory complexities and cultural differences in the MERCOSUR market.
The two sides are looking to upgrade the existing PTA into a comprehensive free trade agreement covering goods, services and investments. Such an agreement could improve market access, reduce trade barriers and support India’s export diversification efforts.
According to official data, total trade between India and Argentina, Brazil, Paraguay and Uruguay stood at US $17.48 billion in 2024–25, comprising US $8.12 billion in exports and US $9.36 billion in imports.
India’s textiles and apparel exports to the MERCOSUR bloc have also increased in recent years.
As per reports India exported US $203 million worth of textiles and apparel to MERCOSUR in 2024, compared with US $171 million in 2023 and US $148 million in 2022.
Within this, apparel exports reached US $113 million in 2024, up from US $101 million in 2023 and US $94 million in 2022.
India’s home textile exports to the bloc stood at US$57 million in 2024, compared with US$41 million in 2023 and US$34 million in 2022. Fabric exports increased to US$33 million in 2024, from US$29 million in 2023 and US$20 million in 2022.
