Brazil, India move to widen Mercosur trade pact: What it means

Brazil and India are working towards broadening the existing India-Mercosur preferential trade agreement, with the two nations finalising the terms of reference that could lead to negotiations for a wider trade arrangement, according to Brazil's Minister of Development, Industry, Trade and Services, Márcio Elias Rosa. India is regarded as an essential trading partner for Brazil, as highlighted by Rosa during his meeting with India's Commerce and Industry Minister Piyush Goyal.

The existing trade arrangement provides preferential tariff concessions on 450 tariff lines from India and 452 from Mercosur (Brazil, Argentina, Uruguay, Paraguay, and Bolivia), with reductions ranging from 10% to 100%. The objective of the expanded agreement is to elevate the current Preferential Trade Agreement (PTA) into a comprehensive Free Trade Agreement (FTA), encompassing goods, services, and investments, thus enhancing market access and diminishing trade barriers.

The primary goal is to double bilateral trade between Brazil and India to US$30 billion by 2030, following Brazilian President Luiz Inácio Lula da Silva's visit to India in February 2026. The talks between Brazil and India aim to broaden the commercial relationship beyond existing tariff preferences and explore new areas for greater market access.

They also intend to focus on sectors such as the bioeconomy, circular economy, digital economy, artificial intelligence, skills development, and defence.