Brazil and India aim to expand Mercosur trade pact for broader market access
Milwaukee: Brazil and India are moving towards substantially expanding the existing India-Mercosur preferential trade agreement, with the two sides completing work on terms of reference that could pave the way for negotiations on a broader trade arrangement, a senior Brazilian minister has said.
Brazil’s Minister of Development, Industry, Trade and Services Márcio Elias Rosa said India was an important economic partner for Brazil and that the existing trade arrangement was too limited.
“India is a highly important trading partner to Brazil,” Rosa told IANS in response to a question on the sidelines of the G20 Trade Ministers’ Meeting here.
“India is an economy that is very important to the whole wide world. We have good relations with them,” he said.
Rosa was responding to questions from IANS after his meeting with India’s Commerce and Industry Minister Piyush Goyal.
“What we discussed now is a possibility of having an agreement, a broad agreement, between the two economies and Mercosur,” he said.
Mercosur is the South American trade bloc that includes Brazil.
Rosa said the existing preferential trade arrangement between India and Mercosur covered only a small number of products.
Expansion talks launched: India and Mercosur (Brazil, Argentina, Uruguay, Paraguay, Bolivia) announced on 14 September 2026 the start of negotiations to expand their existing Preferential Trade Agreement (PTA), aiming to deepen economic ties and create new opportunities for businesses on both sides.
Terms of Reference finalised: Both sides are finalising the Terms of Reference (ToR), which will define the scope and structure of the expanded agreement, with Brazil and India completing work on these terms as of 1 October 2026.
From PTA to FTA: The long-term goal is to upgrade the current PTA—operational since June 2009—into a comprehensive Free Trade Agreement (FTA) covering goods, services and investments, significantly enhancing market access and reducing trade barriers.
Current concessions: The existing PTA provides preferential tariff concessions on 450 tariff lines from India and 452 from Mercosur, with reductions ranging from 10% to 100%.
Paperless trade protocol: On 14 September, India and Mercosur signed the First Additional Protocol to the PTA, facilitating the acceptance of electronic Certificates of Origin (CoO) to streamline customs procedures and support paperless trade.
Strategic diversification: The move aligns with India’s strategy to diversify export markets amid global economic volatility and supports Brazil’s push to broaden commercial relationships beyond existing tariff preferences.
Trade target: During Brazilian President Luiz Inácio Lula da Silva’s visit to India in February 2026, both countries agreed to double bilateral trade to US$30 billion by 2030, providing a backdrop for the expanded negotiations.
“We already have a tariff preference agreement, but it’s very shy. It’s just 450 tariff funds. Meaning that nothing absolutely. So we need to expand that,” he said, according to the English interpretation provided during the gaggle.
The Brazilian minister indicated that discussions with India had already advanced to the stage of defining the framework for further negotiations.
“We’ve just finished drafting a term of reference. Similar to what is just now being drafted with the US,” Rosa said.
“Once we define that, we can build proposals,” he added.
Rosa described his meeting with the Indian side as “excellent” and indicated that further work would take place over the coming months.
The discussions point to an effort by Brazil and India to broaden a commercial relationship beyond the existing tariff preferences and identify areas where greater market access could be negotiated.
The minister separately identified several sectors in which Brazil and India could deepen cooperation, including the bioeconomy, circular economy and digital economy.
He also referred to artificial intelligence, skills development and defence during the discussions.
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