India and MERCOSUR Plan to Expand Trade Pact
India and the South American trade bloc MERCOSUR have revealed intentions to initiate discussions to enhance their current trade agreement, the Commerce Ministry announced, as New Delhi seeks diversified export markets and strengthens commercial ties amidst global economic instability.
The agreement, in effect since June 2009, currently offers India tariff reductions on 450 product categories, whereas MERCOSUR gives discounts on 452 lines. In 2025, the bilateral trade between India and the group amounted to $21 billion.
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According to a statement from the Commerce Ministry, Commerce and Industry Minister Piyush Goyal and Uruguay’s Foreign Affairs Minister Mario Lubetkin announced the start of the negotiations.
Both parties are “in the process of finalizing the terms of reference, which will define the scope and structure of the future expanded agreement,” it added.
MERCOSUR consists of Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The initiative comes as India seeks to expand its shipping portfolio, while its strong growth prospects in the face of global uncertainty have motivated nations and trading alliances to enhance economic collaboration with New Delhi.
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Moreover, India and MERCOSUR signed a protocol aimed at facilitating paperless trade and updating customs processes.
“The move is expected to facilitate the transition towards digital and paperless trade documentation, reduce transaction costs and processing time associated with the issuance and verification of Certificates of Origin, and improve the efficiency of preferential trade under the existing India-MERCOSUR preferential trade agreement (PTA),” the Commerce Ministry says.
The initiative arises from conversations held within the Joint Administrative Committee of the India-MERCOSUR PTA.
In a meeting last November, both teams supported revising the agreement to allow digital certificates of origin, a suggestion that was later approved by consensus during the fifth Joint Administrative Committee gathering on April 9.
The PTA between India and MERCOSUR was signed on January 25, 2004, and took effect on June 1, 2009. According to the current agreement, India offers preferential tariff reductions on 450 tariff lines, whereas the MERCOSUR side extends concessions on 452 tariff lines. The choice to extend the agreement comes after talks within the Joint Administrative Committee of the India-MERCOSUR PTA.
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During its fourth meeting on November 27, 2025, both parties endorsed revising the agreement to enhance the use of digital Certificates of Origin. The proposal for the extra protocol was subsequently accepted by unanimous agreement during the committee's fifth meeting on April 9, 2026. The First Additional Protocol will take effect once India and the MERCOSUR nations finalize their internal processes and inform one another.