India, Mercosur Plan Expansion of Trade Pact

India and Mercosur announced plans on 14 September 2026 to begin negotiations for expanding their existing Preferential Trade Agreement (PTA). Mercosur is a South American regional economic bloc comprising Brazil, Argentina, Bolivia, Uruguay and Paraguay.

India-Mercosur Preferential Trade Agreement

The India-Mercosur PTA has been operational since June 2009. Under the agreement, India receives duty concessions on 450 product categories, while Mercosur receives concessions on 452 product categories.

Bilateral trade between India and Mercosur reached about US21 billion in 2025, and some trade estimates for 2025-26 place the figure at US21.8 billion. The two sides are preparing Terms of Reference for the expanded negotiations, which will define the scope and structure of the future agreement.

Trade Expansion and FTA Pathway

The proposed expansion of the PTA is intended to move towards a comprehensive Free Trade Agreement (FTA). A PTA covers selected goods with tariff concessions, while an FTA generally covers a wider range of goods and may include services, investment and trade facilitation rules.

Mercosur functions as a customs union and a common market initiative in South America. Its members use the bloc for coordinated trade policy and external trade negotiations.

Paperless Trade and Customs Modernisation

India and Mercosur also signed the First Additional Protocol to the PTA on 14 September 2026. The protocol provides for paperless trade and accepts electronic Certificates of Origin for customs procedures.

The protocol was adopted by mutual consent at the fifth meeting of the Joint Administrative Committee on 9 April 2026. Electronic certificates are used in international trade to verify the origin of goods and to support tariff concessions under trade agreements.

Important Facts for Exams

• Mercosur stands for the Southern Common Market, a South American regional bloc.
• The India-Mercosur PTA has been in force since June 2009.
• Preferential Trade Agreements grant tariff concessions on selected goods rather than full tariff elimination.
• Certificates of Origin are trade documents that establish the country of origin of exported goods.

Static Facts on Mercosur

Mercosur includes five member countries: Brazil, Argentina, Bolivia, Uruguay and Paraguay. Uruguay currently holds the pro tempore presidency of Mercosur through its foreign minister.