India is exploring new export destinations to offset the impact of slowing demand in developed economies and the recently announced US tariffs. An Indian trade delegation is expected to meet a delegation from MERCOSUR this month to hold preliminary exploration to expand the existing Preferential Trade Agreement (PTA) to a Free Trade Agreement (FTA), Government sources told CNBC-TV18.
India is exploring multiple export destinations to cushion the impact of a slowdown in several developed economies and the recently announced tariffs by the United States.
The trading bloc MERCOSUR comprises of the countries Brazil, Argentina, Paraguay, Uruguay; which already has a PTA with India since 2004, which covers 450-odd tariff lines. MERCOSUR countries comprise of over 67% of the total economic share of South American economies. The collective size of the economy of all South American countries is $4.38 trillion, of which the collective size of the economies of the MERCOSUR member countries is $2.94 trillion. Stating that internal discussions within the trading bloc are underway on expansion of PTA to FTA, Government sources pointed out that a wider FTA will allow access for Indian exporters to large markets in MERCOSUR member countries. An FTA is also expected to allow Indian exports to access newer markets in the Caribbean and Pacific regions, many of which use MERCOSUR countries are trans-shipment hubs.
With an increase in geopolitical uncertainty due to ongoing conflicts and economic slowdown in many developed countries, India is looking to secure supply chains for critical minerals and petroleum products with potential trade deals with several Latin American countries. In December 2024, Government sources told CNBC TV18 that India is aiming to get duty concessions for exports of engineering goods and other items to Latin American countries, as it aims to benefit from lessened distance for freight due to China’s new port on Peru’s Pacific coast. India is also in talks with Peru and Chile to expand cooperation in trade. While Peru had indicated plans last year to conclude a trade pact with India in 2025 with 8 rounds of negotiations already been held, India and Chile held the 1st round of negotiations in May 2025 to expand an existing PTA to an FTA.
Reader / Viewer discretion and disclaimer :
The information provided on SMEConnect (www.smeconnect.in) website is intended for general informational purposes only. While we strive to provide accurate and up-to-date information, we cannot guarantee the accuracy, completeness, or reliability of the content. The views and opinions expressed in the articles and posts on this website are those of the authors and do not necessarily reflect the official policy or position of SMEConnect website. Readers are advised to independently verify any information found on this website before making decisions based on it. We do not endorse, represent, or warrant the accuracy or reliability of any third-party content linked on this site. Furthermore, SMEConnect (www.smeconnect.in) website shall not be held liable for any errors, omissions, or delays in the information provided, nor for any losses, injuries, or damages arising from its display or use. Please note that the content on SMEConnect (www.smeconnect.in) website may be subject to change without notice.
