New Delhi is in talks with Argentina and Brazil to sign trade agreements with the two largest markets in South America as it aims to strengthen commerce with the region.

India already has a preferential trade agreement (PTA) with Mercosur, a trading bloc of Argentina, Brazil, Paraguay and Uruguay, which was set up in 1991 to facilitate the free movement of goods, services and capital. Officials, however, say the bloc’s internal issues have flagged the need for bilateral agreements. 

The four-nation bloc has been grappling with various issues such as government changeovers and uncertainty over membership. Brazil has lately been pushing to deepen its relationship with India as its ties with neighboring Argentina have deteriorated. 

“We are trying for separate pacts with Brazil and Argentina,” an unnamed Indian official told the Economic Times. “These two are the biggest markets in that region and have shown interest in trade pacts.” 

“Mercosur countries have their internal problems and talks to expand the PTA are stalled,” they added. 

Statistics show that India’s exports to Argentina in the April-September period stood at $276.34 million, while imports were $1.16 billion. During the same period, India exported $1.65 billion worth of goods to Brazil, including auto components, pharmaceuticals and petroleum products, and imported $1.12 billion worth of merchandise, mainly crude oil, gold, vegetable oil, sugar and bulk mineral and ores. 

“They are commodity exporters and the largest markets in that region,” the Federation of Indian Export Organizations director general, Ajay Sahai, was quoted as saying by ET. “Though freight is a disadvantage, a bilateral or trilateral pact with Brazil and Argentina can be beneficial to India. Moreover, the region’s proximity to the US will be an advantage to India’s IT industry.”

According to Sahai, other countries in the region could follow suit and show interest in sealing similar agreements with India.

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