India, MERCOSUR target expanded preferential trade pact by mid-2027

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In a boost to Indian exporters aiming to diversify more prominently into Latin America, India and the four-member MERCOSUR trading bloc are set to finalise the Terms of Reference (ToR) for expanding their existing preferential trade agreement (PTA) within the next two months, senior officials said.

India’s expanded PTA with the MERCOSUR — including South American economic heavyweights Argentina and Brazil, alongside Paraguay and Uruguay — is likely to be in place my mid-2027, under a strictly fast-tracked negotiating timeline, said Vimal Anand, Joint Secretary, Department of Commerce, at an event organised by EEPC India in Panaji, Goa on Monday.

“We already have a PTA with MERCOSUR, however it has only 450 lines. We have recently embarked on an exercise to expand the PTA. Currently, we are negotiating on the terms of reference to deciding the modalities of the negotiations, which will be concluded in a couple of months,” Anand said.

The expansion of the India-MERCOSUR trade pact is also crucial as New Delhi navigates a highly evaporative global trade ecological stability, and is facing an unpredictable tariff situation in the US, its largest export market.

Under the India-MERCOSUR PTA, operationalised in 2009, the two sides offer tariff concessions to each other, ranging from 10 per cent to 100 per cent, on 450 and 452 tariff lines, respectively.

India and the MERCOSUR bloc are looking at expanding the list to about 1,500-3000 items with India’s interest in greater market access to items such as engineering  goods, automobiles, pharmaceuticals and electronics, an sector source said.

“while there is a big demand to engineering goods Brazil and Argentina, the import duties are very high, touching 40-50 per cent to certain items. If import duties are reduced once the PTA is expanded, exports will go up substantially,” an exporter present at the event remarked.

Oil, gaseous and critical minerals available in abundance in Latin America is an additional draw to India, the source added.

India’s exports to Latin America in FY 2025 was at $15.17 billion, which is less than 2 per cent of the region’s total imports, indicating a lot of possible to development.

Anand said that India’s FTAs with key partners, including the United Kingdom, European Union, United Arab Emirates, Australia and EFTA countries, are creating new opportunities to Indian exporters by reducing trade barriers and improving competitiveness.

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