RTTNews - India's Preferential Trade Agreement or PTA with Mercosur came into existence from June 1, 2009. During the fiscal year 2008, India had exported around $2,904.80 million and imports of around $1,868.39 million, taking the total trade to $4,773.19 million. The combined trade between India and Mercosur is expected to more than double to $10 billion in the next five years.

G.V. Pappalardo, ambassador of Paraguay, one of the Mercosur members, said this development would open up new trade and business opportunities for the nations at a time when adverse fallout of the international financial turmoil has engulfed the world.

The South American Common Market, more commonly known as Mercosur, is the largest integrated market after the European Union (EU) and North American Free Trade Agreement (Nafta). This treaty is, significantly, the bloc's first outside the region.

The economic bloc comprises of Argentina, Brazil, Paraguay and Uruguay. It was formed in 1991 with the objective of free movement of goods, services, capital and people and became a customs union in January 1995. Mercosur's role model is European Union.

On June 17, 2003, FTA was signed between India and Mercosur at Asuncion, Paraguay with an aim to create conditions and mechanisms for negotiations by granting reciprocal tariff preferences in the first stage, and to negotiate a free trade area between the two parties in the second stage.

As a follow up to the said FTA between India and Mercosur was signed in New Delhi on January 25, 2004 and five annexes to this Agreement were signed incorporated on March 19, 2005. By this PTA, India and Mercosur have agreed to give tariff concessions, ranging from 10% to 100% to the other side on 450 and 452 tariff lines respectively.

The major product groups covered in the offer are food preparations, organic chemicals, pharmaceuticals, essential oils, plastics & articles thereof, rubber and rubber products, tools and implements, machinery items, electrical machinery and equipments.

The major sectors covered in offer list of India are meat and meat products, inorganic chemicals, organic chemicals, dyes & pigments, raw hides and skins, leather articles, wool, cotton yarn, glass and glassware, articles of iron and steel, machinery items, electrical machinery & equipments, optical, photographic & cinematographic apparatus.

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