Namrata Kath Hazarika | 31 Mar, 2010
India-Mercosur is likely to meet in May to make further discussion on preferential trade agreement (PTA), which has been inked on June 1 last year.

The Ambassador of the Argentina Republic, Ernesto C. Alvarez informed SME Times about this development and said in New Delhi on Tuesday, "Already we (Mercosur) have the Preferential Trade Agreement (PTA) with India, which has been forced in June 2009. In first week of May this year a meeting is expected to be held in New Delhi between high ranked officers of both the parties to discuss further and advance in the widening of goods with preferential tariffs covered under this agreement."

He underscored that this would be another business opportunity for both India-Mercosur to deepen their economic ties.

Alvarez has requested that it is requisite for both the countries to put some pressures in the negotiations in order to deepen the trade agreements.

Denying to speak on the additional products which will be included in the upcoming meeting on India-Mercosur PTA, the Argentina Ambassador said, "I won't be able to tell which would the additional items included in the agreement for lowering of tariffs. We are working on the details as of now."

With the signing of the PTA, it has been expected that trade between India and Mercosur would double to $10 billion from the present $5 bilion in the next 3 to 5 years.

A total of 452 items of India's exports to Mercosur and 450 items of import will get customs duty discounts of 10% and 20%, in few cases even 100%.

While, the PTA contemplates lowering of tariffs for a list of specific products which include chemical components, some agricultural items, household appliances (for Mercosur into India) and petrochemicals, pharmaceutical products and components, vaccines, industrial machinery ( for India into Mercosur).

In fact, the Ambassador of Brazil, Marco Brando has also highlighted the need of Preferential Trade Agreement (PTA) and said that the agreement has been very useful matter for trade relations. But, it is requisite to update it.

He said that they are planning to add some associate members in the Mercosur bloc and Chile & Venezuela are few names amongst all.

Moreover, the meeting would also be attended by the members of Brazil, Paraguay, Uruguay and Argentina--the four countries of South America including the Indian Ministry of Commerce and Industry.

At present, India’s major exports to the Mercosur countries include drugs, pharmaceuticals and fine chemicals, transport equipment, inorganic/organic/agro chemicals, cotton yarn and cotton and man-made fabrics, made-ups, readymade garments, dyes, intermediates and coal tar.

On the other hand, the Mercosur countries, on the other hand, export to India products such as edible oils (primarily soya bean), metalliferous ores, metal scrap and non-electrical machinery, with soya bean oils comprising around two-thirds of total exports.