India is expected to push Brazil to fast-track negotiations for the expansion of the India-MERCOSUR Preferential Trade Agreement (PTA), of which both nations are part, during Brazilian President Jair Bolsonaro’s four-day visit, which started on Friday.
Bolstering efforts to widen the number of products covered under the PTA remains an important agenda for New Delhi. Back in mid-July, India had asked Brazil to fast track negotiations on New Delhi’s PTA with the Latin American economic bloc, which also includes Argentina, Uruguay and Paraguay. Signed in 2004, the PTA is the only major way India accesses the continents with a vast consumer market.
India has partial admission in the regional bloc, and about two-thirds of its total trade with the region is through this avenue. The Commerce Department had earlier called for the PTA to be re-examined since it is “limited in many ways”. It came into force on June 1, 2009.
In 2017, the government told Brazil it wanted to bring 484 specific tariff lines into the PTA. It was later reported that MERCOSUR had offered the same number of lines to India. New Delhi is keen to negotiate on the Margin of Preference on tariff lines, which are to be offered by each side, sources in the know say.
Business relations between India and LAC are mainly by way of investments, as conventional trade in goods has challenges on account of distance, time zone difference, and business culture. Bolsanaro is set to meet with 23 Indian business leaders from companies, including those from Sterlite Power, Apollo Hospital, Oyo Rooms, Tech Mahindra, Tata Consultancy Services, Zydus Cadila, and Transport Corporation of India Limited, among others.
Bolsanaro is accompanied by eight ministers. The Ministry of External Affairs said there will be ‘intense discussions between the government and the industry on cooperation in oil and gas, especially in the area of hydrocarbons, bio fuel and minerals’ during the visit. While Brazil’s investment in India is about $1 billion, India has made around $6 billion worth of investments in the country, according to official sources. On Monday, Bolsanaro is set to address India Inc during a joint business session with industry bodies Assocham, CII and Ficci.
Source: Business Standard