VP Naidu’s Paraguay visit: South American country offers big opportunities in space and pharma

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Published: February 25, 2019 6:56:23 PM

Foreign companies in Paraguay have a simple tax regulation, with reduced amount of taxes and reduced rates.

VP Naidu Paraguay visit, pharma, MERCOSUR, Paraguay, India, Maquila Regime, Paraguayan EconomyAs reported earlier a large business delegation will be accompanying Vice President Venkaiah Naidu, during his week long forthcoming visit to Paraguay and Costa Rica early next month.

Indian companies can find business opportunities in various sectors in South American nation Paraguay including organic fertilizers, pharmaceutical, metallurgical and assembly, training institutes, and space cooperation. As reported earlier a large business delegation will be accompanying Vice President Venkaiah Naidu, during his week long forthcoming visit to Paraguay and Costa Rica early next month.

Speaking to the Financial Express Online, Gustavo Rojas, Researcher at the Center of Analysis and Dissemination of the Paraguayan Economy – CADEP, says “Paraguayan pharmaceutical companies already make extensive use of Indian supplies. The direct presence of Indian pharmacists could expand the population’s access to generic medicines, also accessing MERCOSUR’s broad public procurement market.”\

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Foreign companies in Paraguay have a simple tax regulation, with reduced amount of taxes and reduced rates. “It is the least bureaucratic business environment among the MERCOSUR countries. Import tariffs on inputs and capital goods are the lowest in the commercial block. The country also has differentiated rules of origin that allows the aggregation of up to 60% of origin not from MERCOSUR,” Rojas adds.

There are growing concerns about promoting more sustainable agriculture in Paraguay and India presents a remarkable development of its organic fertilizer industry, which could help to raise the productivity of commercial and family agriculture, he points out.

According to him, Indian metallurgists can find a competitive combination in Paraguay: proximity and low cost of access to Brazilian iron ore through the Paraguay – Paraná Waterway and access to cheap and sustainable electric power generated by the Itaipú and Yacyretá Hydroelectric Plants. The maquila regime can be an interesting tool for auto parts and electro-electronics manufacturers.

What is Maquila Regime?

It is a system in which goods are produced and services are provided for the international market and the main objectives include: industrial development, employment generation and increased exports. The production of products or provision of services is made by company legally established in Paraguayan territory, which is the Maquila Company, for and on behalf of a company domiciled abroad, which is the Head Office according to the Maquila Contract.

The National Council of the Export Maquila Industry (CNIME) is the official promoter of the Maquila policies in Paraguay. It is directed by the Ministry of Industry and Trade and it is composed by four more State institutions: Ministry of Finance, Ministry of Foreign Affairs, Central Bank of Paraguay and Technical Planning State Office.

India could also play a major role in setting up schools and training institutes in that country. “The youth is looking for institutes to teach English so that they can apply for jobs in the aviation and hospitality industry. There is also a curiosity for getting entry into merchant vessels and other related services. India which is known for its institutes has a great opportunity to open them in Paraguay,” said a native of Paraguay.

Possible space cooperation?

Paraguay created its Space Agency in 2014 and, last January, defined its space policy. In this initial stage, international cooperation initiatives are essential to promote capacity building and technology transfers.

Over the past few years, China has offered its competitive satellite construction and launch services to various South American countries. Countries like Venezuela and Bolivia have launched their first satellites with Chinese cooperation. “But Paraguay does not maintain official relations with China, so India could become a strategic partner to boost its space program at low cost. The spatial cooperation directed to the environmental, climatic and telecommunications area would be relevant,” says Rojas.

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