India and Mercosur open talks to widen a 2009 preferential trade pact
Piyush Goyal and Uruguay's Mario Lubetkin launched expansion talks on 14 September and signed a protocol giving electronic certificates of origin the same force as paper. The current PTA covers about 450 Indian tariff lines and 452 Mercosur lines.
New Delhi2 min read
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Commerce Minister Piyush Goyal and Uruguay's foreign minister Mario Lubetkin announced on 14 September that India and Mercosur would negotiate an expansion of their Preferential Trade Agreement. Lubetkin was in Delhi as holder of Mercosur's pro tempore presidency. Commerce Secretary Rajesh Agrawal signed a first additional protocol with Uruguay's ambassador Alberto Guani and Paraguay's ambassador Fleming Raul Duarte Ramos. Diplomats from Argentina and Brazil attended.
The protocol gives electronic certificates of origin the same legal force as paper certificates, once each side finishes internal procedures and notifies the other. Certificates must be issued and signed under each party's domestic law by authorised bodies. The commerce ministry said the change should cut the time and cost of proving origin and move the PTA toward paperless documents.
What the 2009 pact actually covers
India and Mercosur signed the PTA on 25 January 2004. It entered into force on 1 June 2009. India gives preferences on about 450 tariff lines. Mercosur gives them on about 452. Cuts range from 10 percent to 100 percent. The bloc in this agreement is Brazil, Argentina, Paraguay, Uruguay and Bolivia. Venezuela has been suspended since 2016. That is a thin list relative to two-way trade potential. Officials on both sides said they want to turn the PTA into a broader free-trade agreement covering goods, services and investment. Terms of reference for the expanded talks are still being finished.
Lubetkin, who also praised India's BRICS chairship while in Delhi, treated the protocol as the first usable deliverable after more than twenty years since the original signature. Electronic origin documents sound clerical. They are how a Brazilian or Argentine exporter actually claims the preference in an Indian port, and how an Indian exporter does the same in Santos or Montevideo. If the paper form is the bottleneck, digital signatures are the part of the announcement that changes a shipment this year. The wider FTA is the part that does not.
Why Delhi is doing this now
India is already in a live CEPA round with Canada and is watching energy costs after the Saudi East-West pipeline outage and the Hormuz disruption. Mercosur offers soy, sugar, minerals and a market for Indian pharmaceuticals, vehicles and information-technology services. A wider goods list would matter more than the origin protocol. It also collides with Indian farm politics and with Argentine and Brazilian industrial lists. That is why the terms of reference are still unsigned.
The 14 September package therefore splits in two. One half, the e-certificate protocol, has a text and a path into force after notifications. The other half, the expansion talks, has a press statement and a promise to define scope. Exporters should price the first. They should treat the second as a negotiation that has started, not as access they can book.
