paraguay
PARAGUAY
BOOSTING BUSINESS
RELATIONSHIP
WITH INDIA
BY HUMA SIDDIQUI*
P
araguay’s steady growth is primarily driven by
the export-oriented agriculture sector, followed by
hydroelectric power generation. This, together with
good macroeconomic management, has allowed the South
American nation to generate a fi scal surplus of 0.6 percent
of GDP on average for the 2005-2018 periods and maintain
public debt below 27 percent of GDP.
The country is seeking India’s cooperation for building
its infrastructure and solutions for diversifying its economy.
The only country in the world which has a transparency
law regarding public information is looking to India for
collaborations and ventures in various sectors including
education, health, agriculture, renewable energy, and machinery.
To attract investors, the landlocked country is planning to give
more tax incentives to companies wanting to invest there.
The government of Paraguay is pursuing policies such as
8 • PARAGUAY 2019
Law 60/90, Maquila Regime, incentives for Forestry together
with low tax benefi ts in to attract investments to promote
development. Foreign companies in Paraguay have a simple
tax regulation, with a reduced amount of taxes and rates.
The Indian business houses can look at Paraguay as a
gateway to Pacifi c Alliance member countries including
(Peru, Chile, Colombia, and Mexico) and MERCOSUR
(Argentina, Brazil, Paraguay and Uruguay) which together
make up for 80 percent of market share in the region.
“It is the least bureaucratic business environment among
the MERCOSUR countries. Import tariff s on inputs and capital
goods are the lowest in the commercial block. The country also
has diff erentiated rules of origin that allows the aggregation
of up to 60 percent of origin not from MERCOSUR,” says
Gustavo Rojas, Researcher at the Centre of Analysis and
Dissemination of the Paraguayan Economy (CADEP).