India, South American bloc Mercosur announce plan to expand trade pact

The move comes as India seeks to diversify export markets and deepen trade ties amid global economic turmoil.

New Delhi: India and the South American trade bloc Mercosur have begun negotiations to expand their existing trade agreement, the commerce ministry said on Monday, as New Delhi seeks to diversify export markets and deepen trade ties amid global economic turmoil.

The agreement, operational since June 2009, currently provides India with duty concessions on 450 tariff lines, or product categories, while Mercosur offers concessions on 452. Bilateral trade between India and the bloc stood at $21 billion in 2025.

Commerce and industry minister Piyush Goyal and Uruguay's minister of foreign affairs Mario Lubetkin announced the start of the negotiations, according to the the commerce ministry statement.

Both sides are "in the process of finalising the terms of reference, which will define the scope and structure of the future expanded agreement," it added.

Broadening base

Mercosur comprises Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The move comes as India seeks to broaden its export base, while its strong growth prospects amid global turmoil have prompted countries and trading blocs to deepen economic engagement with New Delhi.

India has signed several trade agreements in recent years with economies including the European Union, the UK, the United Arab Emirates and Australia. The country has remained the world’s fastest-growing major economy since 2021-22, and the International Monetary Fund expects it to retain that status for at least the next two years. Its economy expanded at a higher-than-expected pace of 7.8% in the June quarter of fiscal year 2027 (Q1FY27) despite external headwinds.

For paperless trade

Separately, India and Mercosur signed a protocol on Monday to facilitate paperless trade and modernise customs procedures.

“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 said.

The initiative follows deliberations in the Joint Administrative Committee of the India-Mercosur PTA. At a meeting in November last year, both sides supported updating the agreement to enable the use of digital certificates of origin. The proposal was subsequently adopted by mutual consent at the fifth meeting of the Joint Administrative Committee on 9 April 2026.

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