India, MERCOSUR Begin Negotiations to Broaden Trade Deal and Modernise Customs

India and the South American trade grouping MERCOSUR have begun negotiations to widen their existing preferential trade agreement, marking another step in New Delhi’s efforts to expand its presence in emerging international markets. The Commerce Ministry announced the development as India looks to diversify its export destinations and build stronger trade relationships at a time of continuing uncertainty in the global economy.

India’s existing preferential trade arrangement with MERCOSUR has been operational since June 2009. Under the current framework, India receives tariff concessions on around 450 product categories, while MERCOSUR provides concessions across 452 tariff lines. Trade between India and the bloc climbed to around $21 billion in 2025, highlighting the growing significance of Latin America for India’s external commerce.

Commerce and Industry Minister Piyush Goyal and Uruguay’s Foreign Affairs Minister Mario Lubetkin formally announced the start of the negotiations. The two sides are currently working on the terms of reference, which will establish the areas to be covered and the framework for discussions on an expanded agreement.

MERCOSUR includes Brazil, Argentina, Bolivia, Uruguay and Paraguay, giving India access to one of Latin America’s major economic groupings. The renewed trade negotiations come as India seeks to create additional opportunities for domestic businesses and reduce excessive dependence on a limited number of export markets. The country’s relatively strong economic growth has also increased interest among international trading partners looking to strengthen commercial engagement with India.

Alongside the decision to expand the trade pact, India and MERCOSUR have signed a protocol focused on moving customs and trade documentation towards a more digital and paperless system. The initiative is expected to make the processing of Certificates of Origin more efficient by reducing paperwork, lowering transaction expenses and shortening the time required for issuing and verifying the documents. Such changes could make it easier for exporters and importers to access the tariff benefits available under the existing India-MERCOSUR agreement.

The move follows discussions held through the Joint Administrative Committee of the India-MERCOSUR Preferential Trade Agreement. During talks in November last year, the two sides considered allowing digital Certificates of Origin. The proposal later received approval at the committee’s fifth meeting on April 9, clearing the way for the latest protocol.

For India, stronger engagement with MERCOSUR fits into its broader strategy of deepening South-South economic cooperation and increasing its commercial footprint in Latin America. The region is particularly important for sectors such as agriculture, energy and critical minerals, all of which have growing relevance to India’s long-term economic requirements. An expanded agreement could also create additional opportunities for Indian companies operating in areas such as pharmaceuticals, engineering goods and information technology. Greater market access could help exporters reach a wider customer base across South America.

MERCOSUR, meanwhile, stands to benefit from improved access to India’s large and rapidly expanding consumer and industrial market. Greater engagement with India could also help the bloc diversify its international trade relationships at a time when global supply chains and traditional trading patterns are undergoing significant changes. The combination of wider tariff concessions and digital customs procedures could give India-MERCOSUR economic relations fresh momentum. As negotiations progress, both sides are expected to focus on achieving a mutually beneficial arrangement while addressing issues such as market access, supply-chain resilience and the growing importance of digital trade. The talks therefore represent more than an effort to increase the number of products covered by tariff concessions. They also signal an attempt by India and MERCOSUR to build a more efficient and modern trading relationship suited to the changing global economy.

Disclaimer: This image is taken from Indian Defence News.