Why in news
- India and MERCOSUR have launched formal negotiations to expand the scope of their existing Preferential Trade Agreement.
Key terms
Preferential Trade Agreement
A trade pact where participating countries grant preferential access and lower tariff rates to specific products from member nations.
Pro Tempore Presidency
A rotating chairmanship held by member countries of a regional bloc for a fixed tenure.
What is the India-MERCOSUR PTA?
- A bilateral trade agreement signed in 2004 that came into effect in 2009 to provide tariff concessions on select tariff lines.
- MERCOSUR is a South American trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay.
Scope of the Proposed Expansion
- Negotiations aim to expand product coverage beyond the initial limited tariff lines and reduce non-tariff barriers.
- Before: Limited concessional list covering a narrow set of agricultural and industrial goods. After: Broadened trade coverage including services and deeper economic cooperation.
Why it Matters
- Strengthens India's trade presence in Latin America and diversifies critical supply chains for raw materials and agricultural commodities.
Prelims facts
- MERCOSUR was established by the Treaty of Asunción in 1991.
Mains discussion
- Significance of expanding trade ties with Latin America to enhance energy and food security.
Source: PIB English
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