India in Talks with Argentina & Brazil to Sign Trade Pacts

New Delhi: India is in talks with Argentina and Brazil to ink trade pacts with the two largest markets in South America as it seeks to strengthen trade with the region.

New Delhi already has a preferential trade agreement (PTA) with Mercosur, a trading bloc of Argentina, Brazil, Paraguay and Uruguay, but officials said the bloc’s internal issues have come in the way of expanding the extant pact, hence the need for bilateral agreements.

“We are trying for separate pacts with Brazil and Argentina,” an official in the know of the development told ET. “These two are the biggest markets in that region and have shown interest in trade pacts.”

The talks are at a nascent stage, the person said. “Mercosur countries have their internal problems and talks to expand the PTA are stalled,” the official said.

The four-nation bloc has been grappling with various issues such as government changeovers and uncertainty over membership.

Last week at the CII Partnership Summit, commerce and industry minister Piyush Goyal had said India would like to enter into more agreements with Latin American countries and is in dialogue with some of them.

India in Talks with Argentina & Brazil to Sign Trade Pacts

India’s exports to Argentina in the April-September period this year stood at $276.34 million while imports were $1.16 billion. Major items of export include two wheelers, iron and steel, agrochemicals, organic chemicals, bulk drugs and drug intermediates, and motor vehicles, whereas imports include vegetable oils (soya bean and sunflower), finished leather, cereals and pulses.

During the same period, India exported $1.65 billion worth of goods to Brazil including auto components, pharmaceuticals and petroleum products, and imported $1.12 billion worth of merchandise, mainly crude oil, gold, vegetable oil, sugar and bulk mineral and ores.
“They are commodity exporters and the largest markets in that region,” Federation of Indian Export Organisations (FIEO) director general Ajay Sahai said. “Though freight is a disadvantage, a bilateral or trilateral pact with Brazil and Argentina can be beneficial to India,” he said. “Moreover, the region’s proximity to the US will be an advantage to India’s IT industry.”

Sahai said other countries in the region could follow suit and show interest in inking similar agreements with India.

Source: ET