India should re-examine its agreement with the South American economic grouping Mercosur to increase trade between the two regions, a senior official said on Thursday.
According to Commerce Secretary Rita Teaotia, India should re-examine its preferential trade agreement (PTA) with Mercosur for deepening the bilateral economic exchanges between the two regions.
"The bilateral trade flow could increase several fold if the PTA were to be re-structured in keeping with the emerging opportunities for trade expansion," Teaotia said.
The commerce secretary was addressing the inaugural session here of the sixth India-Latin America and Caribbean (LAC) two-day conclave organised by the Confederation of Indian Industry (CII).
Mercosur is a trading bloc in South America comprising Brazil, Argentina, Uruguay and Paraguay. It was formed in 1991 and is the third largest integrated market after the European Union and the North American Free Trade Agreement (NAFTA).
In 2004, India entered into a PTA with Mercosur to promote the expansion of trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area between the parties.
The India-Mercosur PTA has contributed to 68 percent increase in the India-LAC bilateral trade volume.
"Although India's bilateral trade with the LAC region has increased significantly from $3.7 billion a decade ago to $45 billion 2014-15, it is still a small fraction," Teaotia elaborated.
Noting that India's cumulative FDI in LAC is around $15 billion, she said the two regions strongly complement each others in areas such as energy, minerals, pharmaceuticals, chemicals, information technology and automobiles.
"These would serve as building blocks for greater India-LAC trade and investment flows," she said.
The commerce secretary urged the LAC governments to facilitate easier registration and renewal support to the Indian pharma firms which have demonstrated high capability in the area of contract research, clinical trials and data.
She also drew the attention of LAC companies to India's physical infrastructure, services and green technologies sector that offer compelling investment opportunities.
"Logistics and transport connectivity between the two regions will expand as the overall trade and investment flows increase," she predicted.
Teaotia added that, even as India has established deeper trade relations with several LAC countries, and is discussing an FTA (Free Trade Agreement) with Peru, it should also intensify trade relations with the Caribbean countries.
