- India
- Sep 15
India, MERCOSUR ink additional protocol to Preferential Trade Agreement
• India and MERCOSUR signed the first additional protocol to the Preferential Trade Agreement (PTA) to facilitate acceptance of electronic certificates of origin.
• It marks an important step towards facilitating paperless trade and modernising customs procedures between India and the MERCOSUR countries.
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.
• MERCOSUR was established in 1991 by the Treaty of Asuncion, which was later updated in 1994 by the Treaty of Ouro Preto.
• Although Bolivia became a full member of MERCOSUR in July 2024, the country is not part of the agreements, as the negotiations were largely concluded before its accession.
India-MERCOSUR Relations
• The India-MERCOSUR PTA came into effect on June 1, 2009.
• The agreement provides preferential tariff concessions on 450 tariff lines by India and 452 tariff lines by the MERCOSUR side.
• Both sides are looking to expand the scope of the pact.
First additional protocol
• The first additional protocol amends Article 16 of Annex III (Rules of Origin) of the PTA by providing that certificates of origin issued in electronic format shall have the same legal validity and identical value as certificates of origin issued in paper format.
• Such electronic certificates of origin will be required to be issued and electronically signed in accordance with the respective domestic legislation of the Parties, by duly authorised entities and officials.
The move is expected to:
i) Facilitate the transition towards digital and paperless trade documentation.
ii) Reduce transaction costs and processing time associated with the issuance and verification of certificates of origin.
iii) Improve the efficiency of preferential trade under the existing India-MERCOSUR PTA.
• The Protocol will enter into force upon completion of the respective internal procedures by India and the MERCOSUR Parties and notification of the same to each other.