Here’s what is delaying India’s crucial trade pact with the world’s third largest integrated market

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New Delhi | Published: June 4, 2016 7:28:35 AM

India’s bilateral talks for a preferential trade agreement (PTA) with South American countries’ bloc Mercosur are getting delayed as some of the members have sought more time to address concerns raised by the Indian side.

India’s bilateral talks for a preferential trade agreement (PTA) with South American countries’ bloc Mercosur are getting delayed as some of the members have sought more time to address concerns raised by the Indian side. As reported by FE earlier, a high-level delegation from the external affairs and commerce ministries was expected to visit Montevideo in Uruguay for the joint commission meeting. However, a senior government official told FE that “the visit to Uruguay has been postponed and fresh dates are being worked out as some of the member countries have not come back with views of their governments. This is because there have been political changes in member countries like Argentina and Brazil”.

“The bilateral trade flow could increase several-fold if the India-Mercosur PTA were to be restructured in keeping with the emerging opportunities for trade expansion. Although India’s bilateral trade with the Latin America and Caribbean (LAC) region has increased significantly from $3.7 billion a decade ago to $45 billion 2014-15, it is still a small fraction,” said a senior commerce ministry official.

Officials from India and Mercosur are already developing a list of new products to be included in the expanded PTA. The expansion of the agreement will be of strategic importance to boost trade relations between the countries involved and the trade volume target set at $30 billion in 2030. The two regions strongly complement each other in areas such as energy, minerals, pharmaceuticals, chemicals, information technology and automobiles.

Speaking to FE earlier, Carlos E Orlando, ambassador of Uruguay to India had said, “We are interested in the expanded PTA between Mercosur and India as it would benefit us too. Uruguay needs investments to be made in several areas and may also collaborate with India, especially in food products, auto assembly plants and logistic projects.”

Mercosur has become a successful regional market of 260 million people and $2 trillion of GDP. It is the third largest integrated market after the EU and NAFTA. Its full members are Argentina, Brazil, Uruguay and Paraguay.

Obstacles
* India’s bilateral talks for a PTA with South American countries’ bloc Mercosur are getting delayed as some of the members have sought more time to address concerns raised by the Indian side
* A high-level delegation from the external affairs and commerce ministries was expected to visit Montevideo in Uruguay for a joint commission meeting
* However, a senior government official said the visit has been postponed and fresh dates are being worked

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