India, Brazil discuss expansion of Preferential Trade Agreement

• The 7th meeting of India-Brazil Trade Monitoring Mechanism (TMM) was held in New Delhi on October 7. 

• During the meeting, both sides extensively discussed matters related to bilateral trade and outlined a roadmap for taking it forward. 

• The discussions included the review of bilateral trade and investment relations, expansion of India-MERCOSUR Preferential Trade Agreement (PTA), market access issues, visa issues, sectoral collaborations in pharmaceuticals and healthcare, chemicals & petrochemicals, MSME, banking & finance, promotion of industries and internal trade, multilateral issues and other matters of mutual interest.

• There is a target to increase bilateral trade to $20 billion over the next five years.

What is MERCOSUR?

• The Southern Common Market or MERCOSUR (Spanish initials of Mercado Común del Sur) is a regional integration process, initially established by Argentina, Brazil, Paraguay and Uruguay, and subsequently joined by Venezuela and Bolivia.

• Venezuela, which officially joined in July 2012, was suspended from membership in 2017.

• It was established in 1991 by the Treaty of Asuncion, which was later updated in 1994 by the Treaty of Ouro Preto.

• The India-MERCOSUR Preferential Trade Agreement (PTA) came into effect on June 1, 2009. 

Brazil is an important trading partner of India

• India and Brazil established diplomatic relations in 1948, with both countries opening the embassies in the same year. India had opened the Embassy in Rio de Janeiro, the erstwhile capital of Brazil, and later moved to Brasilia in 1971. 

• India and Brazil have shared a very close and multifaceted relationship which was elevated to ‘Strategic Partnership’ in 2006. 

• Both countries also enjoy an excellent cooperation in plurilateral fora such as BRICS, India-Brazil-South Africa (IBSA), G20, G-4, International Solar Alliance, Global Biofuel Alliance, Coalition for Disaster Resilience Infrastructure as well as in the larger multilateral bodies such as the UN, WTO, UNESCO and WIPO.

• Brazil is the largest trading partner of India in the Latin American and Caribbean region. During 2024-25, the bilateral merchandise trade stood at $12.19 billion.

• In 2024-25, bilateral trade reached $12.20 billion. 

• Major Indian exports to Brazil include processed petroleum products (diesel), agro-chemicals (insecticides, fungicides), chemicals, pharmaceuticals, engineering products, textured filament yarn, and unwrought aluminum. 

• Brazilian exports to India included crude oil, soya oil, gold (non-monetary), raw sugar, cotton, gum, wood and turpentine oils, chemicals (carboxylic acids) and iron ore and concentrates.

• The Indian community in Brazil is estimated to be around 4,000 people, with the majority of them living in Sao Paulo, Rio de Janeiro and Manaus.