India and MERCOSUR Group held a meeting on Preferential Trade Pact and exchanged lists of items where each wants greater market access.
Mercosur group wants lower duties in both industrial and agricultural products. India wants to export processed foods, more engineering goods and a wider range of pharmaceuticals to the Mercosur.
MERCOSUR Group comprises Brazil, Argentina, Uruguay and Paraguay.
A Preferential Trade Agreement is a limited free trade agreement where partner countries reduce import duties on a few identified products for the other.
While the PTA between India and Mercosur is presently limited to just 450 products, the two sides have raised their ambitions manifold and are now aiming at providing preferential access to about 3,000 items.
India’s exports to the bloc in 2015-16 were $3.4 billion, while imports were $6.6 billion. This was just a fraction of the country’s bilateral trade with the US valued at $68.6 billion and the EU at $115 billion in the same year.
Under the existing agreement signed in 2009 India has brought down duties in the range of 10 per cent to 100 per cent on 452 items. These include meat products, chemicals, raw hides and skins, leather articles, wool, cotton yarn, glass and glassware, iron and steel, machinery and equipments, optical, photographic and cinematographic apparatus.
India has preferential access in the Mercosur for organic chemicals, pharmaceuticals, essential oils, plastics & articles, rubber and rubber products, tools and implements, machinery items, electrical machinery and equipments.
In the expanded PTA, not only will the number items covered be greater, the margin of preference will be much more.
India and Mercosur have stepped up efforts to expand their preferential trade agreement (PTA) to make greater inroads into the other’s market.