India-MERCOSUR
All South American countries are linked to MERCOSUR
(Brazil, Argentina, Paraguay and Uruguay), either as
Member State or Associate member. Chile, Peru, Colombia,
and Ecuador are associate members of MERCOSUR, in
addition to Guyana and Suriname, which acquired this status
in July 2013. Negotiations for the expansion of the India-
MERCOSUR Preferential Trade Agreement (PTA), has been
going on for long with no end in sight.
While the member countries involved have been keen
on the expansion, the talks are not very ambitious. Current
India-MERCOSUR PTA (2004-2009) is limited (450 and 452
tariff lines) which needs to be expanded. The expansion is
expected to strengthen the trade relations between involved
and the trade volume target is set at $30 billion by 2030.
Both sides have agreed that there is an urgent need to
signifi cantly increase the number of tariff lines in the existing
India-MERCOSUR PTA so that the agreement could cover a
sizeable proportion of bilateral trade
Argentina as a member has been keen for an early
conclusion of the negotiations so that the trade increases
with India.
Keeping in line with Prime Minister Narendra Modi’s
strategy of expanding India’s trade basket, eff orts are on to
expedite the negotiations. The two sides have been trying
to have regular meetings, in fact, one round of negotiations
is expected soon. There has been an agreement amongst all
parties involved that there is an urgent need to signifi cantly
increase the number of tariff lines in the existing India-
MERCOSUR PTA so that the agreement could cover a
sizeable proportion of bilateral trade.
According to Indian government offi cers, India is likely to
see if it can add more tariff lines. India has exchanged a wish
list of 4836 tariff lines at the 8-digit code with MERCOSUR
and the MERCOSUR grouping has exchanged their wish
list of 3358 tariff lines at 8-digit
HS code.
Argentina has
The PTA is being proposed
opened the mining
to be expanded as substantial
sector for Foreign
scope exists for India and
MERCOSUR to explore
Direct Investments
complementarities and benefi ts
(FDI)—whether it is
from increased bilateral trade.
MERCOSUR stands to benefi t
for Lithium or gold or
from India’s world-class
copper. Lithium is the
capabilities in software and
pharmaceutical industries and
major raw material
exports of agricultural products
for batteries used
like soybean and corn. On the
other hand, India can secure its
in electric cars and
oil and other natural resource
India has set a goal to
needs by partnering with the
grouping member countries.
shift to manufacture
The process of expansion
of electric vehicles on
was started earlier and the
a large scale by 2030.
Wi s h L i s t s w e r e a l s o
exchanged between India and
MERCOSUR in 2010. However, the process of expansion
could not proceed further. India had earlier exchanged its
Wish List containing around 1287 tariff lines at an 8-digit
code at HS 2007 nomenclature.
So far, India has offered tariff concessions on meat
and meat products, organic and inorganic chemicals, dyes
and pigments, raw hides and skins, leather articles, wool,
cotton yarn, glass and glassware, articles of iron & steel,
machinery items, electrical machinery, and equipment. And
MERCOSUR has off ered tariff concession relate to food
preparations, organic chemicals, pharmaceuticals, essential
oils, plastics & rubber products, tools and implements,
machinery items, electrical machinery, and equipment.
* The author is Senior Journalist, The Financial Express
9
consumption needs also rise. Argentina is also off ering to
provide the increasing needs for protein intake. Lipotech, an
Argentine company, is seeking investments in India. Lipotech
works on adding minerals in dairy products, like milk.
Argentina has developed cutting-edge farm technologies
and biotechnologies which can help India improve agriculture
productivity and reduce post-harvest losses of farm produce,
as well as easing of phytosanitary norms. Both sides are
having discussions on projects related to agro-business
including pulses which are mostly going to help in India’s
food security. The country has introduced their apples and
pears in the Indian market by getting in 2000 tonnes.
Interestingly, a local pharmaceutical company has
developed a vaccine to control ‘cow sadness’. Soon,
through an agreement being worked between the Institute of
Agriculture Technology of Argentina and the local partners,
it will be produced in India under Prime Minister Modi’s
`Make in India’ initiative.
Argentina has opened the mining sector for Foreign Direct
Investments (FDI)—whether it is for Lithium or gold or
copper. Lithium is the major raw material for batteries used
in electric cars and India has set a goal to shift to manufacture
of electric vehicles on a large scale by 2030.
ONGC-OVL and the state-owned oil company of
Argentina are in an advanced stage of discussion to explore
investment opportunities in newly-discovered reserves of
shale gas and shale oil.
India’s exports to Argentina comprise organic chemicals,
vehicles, and auto parts, lubricants, machinery, sound and
image devices and fabrics among others. India’s imports
from Argentina are soybean oil, sunfl ower oil, leather, wool,
and ferroalloys.
Imports from India are relatively diversifi ed, mainly
manufacturing (motorcycles and its components, supplies,
equipment, and machinery, textiles, chemicals).