India signs free trade deal with South American bloc
March 19, 2005
NEW DELHI (AFP) - India has signed a free trade deal with the South American Mercosur bloc to boost trade.
The agreement was signed on the sidelines of a two-day G-20 (group of 20) ministerial conference being attended by South American trade ministers in the Indian capital.
"Our concrete step to operationalise an India-Mercosur preferential trade agreement will give a fillip to business. India’s bilateral trade with the Mercosur countries was roughly 1.5 billion dollars in 2004," Commerce Minister Kamal Nath told reporters on Saturday.
"It has immense potential to grow further," he added.
India’s exports to the South American Mercosur bloc in 2004 amounted to 566.96 million dollars while imports totalled 849.69 million dollars.
In March last year, India signed a preferential customs duty accord with the South American grouping covering over 600 products in the agricultural, chemical, automobile and pharmaceutical sectors as a precursor to sewing up a free trade pact.
The trade agreement flows from the customs duty accord and now grants reciprocal tariff reductions on 450 items and greater market access.
Mercosur — including Argentina, Brazil, Uruguay and Paraguay, with Chile and Bolivia as associate members — signed a framework trade accord with India in Asuncion last year outside the process of World Trade Organisation talks.
India and Brazil were among developing countries that banded together at the failed WTO talks in Cancun in September 2003 to press the developed world to phase out farm subsidies.
The Cancun talks collapsed after delegates failed to agree on eliminating farm subsidies in industrialized nations and proposals to extend the WTO mandate to cross-border investment.
The Mercosur countries have been seeking free trade deals among developing countries as a way of offsetting the trading clout of developed nations.
India and Brazil have already signalled that they will sit on the same side of the fence in the United Nations (news - web sites) and WTO.