The India-MERCOSUR Preferential Trade Agreement (PTA) is a limited trade agreement, not a comprehensive Free Trade Agreement (FTA), between the Republic of India and the Southern Common Market (MERCOSUR) trade bloc. MERCOSUR is a South American economic bloc whose full members are Argentina, Brazil, Paraguay, and Uruguay.
The concept originated with a Framework Agreement signed on June 17, 2003, in Asuncion, Paraguay, to create conditions for negotiations. The PTA itself was signed on January 25, 2004, in New Delhi, and became operational on June 1, 2009. The agreement was created to expand and strengthen existing relations and promote trade by granting reciprocal fixed tariff preferences, with the long-term objective of creating a free trade area. It supports India's strategy to diversify its trade partners and strengthen engagement with Latin America.
The PTA works by lowering customs duties on a limited "positive list" of products. India offered tariff concessions on 450 tariff lines, while MERCOSUR offered concessions on 452 tariff lines. The tariff preferences granted range from 10% to 100%. The agreement is structured with five Annexes that cover key provisions such as the offer lists for tariff concessions, rules of origin, safeguards, and dispute settlement.
The PTA connects to India’s broader goal of promoting South–South cooperation and serves as a strategic platform for a potential future comprehensive Free Trade Agreement. MERCOSUR is a significant regional economic bloc, representing the fourth largest integrated market globally after the EU, NAFTA, and ASEAN.
The agreement has been subject to recent change: in 2019, both sides agreed to expand the scope of the PTA. This expansion was intended to increase the coverage to over 800 tariff lines and address non-tariff barriers. Discussions have also been held to further expand the list to 1500-2000 products.