What is Mercosur trade deal India is betting big on, how New Delhi plans to unlock South America’s full potential

New Delhi: India is preparing to make a big move in global trade. The country is negotiating an expansion of its preferential trade agreement with Mercosur, the South American trade bloc that includes Brazil, Argentina, Uruguay and Paraguay. The current agreement, which started on June 1, 2009, covers only 450 products. Both sides are now considering turning it into a full-fledged trade agreement.

Sharing the details on Saturday, Minister of Commerce and Industry Piyush Goyal described Mercosur as an extremely important region for India. He said bilateral trade between India and Brazil had increased but was still below expectations.

Trade between the two countries will increase by 25 percent in 2025, exceeding 15 billion dollars. He emphasized that more ambitious targets are needed. Brazil is India’s largest trading partner in the Latin America and Caribbean region.

While commercial ties are expanding in the fields of defence, energy, agriculture and agricultural chemicals, cooperation is also increasing in the fields of healthcare, pharmaceuticals, renewable energy, critical minerals, defense and aerospace.

Goyal invited Brazilian businesses to explore investment opportunities in India.

Speaking at the FICCI event, he emphasized that India is on its way to become the world’s third largest economy, surpassing Germany in the next two years. He attributed this growth to improvements in taxation, logistics, manufacturing, digital infrastructure and trade facilitation.

Goyal pointed out that Brazil’s rich natural resources such as niobium, lithium and iron ore are critical for future technology and global energy transition. He also noted that Brazil’s aerospace, automotive and digital technology sectors are rapidly developing and that these sectors offer ample opportunities for cooperation.

He said India and Brazil together can innovate global supply chains, leverage resources, innovation and forward-thinking strategies.

The two countries have set an annual bilateral trade target of $20 billion for the next five years. They also signed an agreement to strengthen cooperation in key mining sectors. The agreements followed extensive talks between Prime Minister Narendra Modi and Brazilian President Luiz Inácio Lula da Silva.

President Silva emphasized the tremendous potential of expanding trade between the two countries. He said that although current growth is positive, it is modest given the size of India and Brazil. He emphasized that both countries are now looking beyond Europe, the United States, Japan and China and predict that bilateral trade could reach $30 billion.

The Brazilian president also emphasized the potential for deep political, economic, cultural, scientific and technological integration between India and Brazil. He added that the extension of business visas for trade interns from five to ten years will further support this cooperation.