Even after seven years, India and Latin America are still to expand their trade relations.
Despite both the previous and the current governments laying stress on the need to enhance export footprints in the South American region, talks for increasing the scope of the already existing preferential trade agreement (PTA) have not yet concluded.
According to a senior commerce ministry official, “connecting India with the Latin American region is the top most agenda on the strategy to revive the falling exports. Talks have been on for quite sometime and are still underway.”
Experts say that the delay in closing the trade deal is making India lose a major and strong market.
Latin America, which is the new destination of our exporters including the ones in automobiles, pharma, handicrafts, was termed to be the saviour for arresting the decline in exports in the country’ foreign trade policy (FTP) unveiled in 2009 as well as in the FTP of 2015.
“The Mercosur region which includes Latin American countries such as Brazil, Argentina, Uruguay and Paraguay is the third largest integrated market after the European Union (EU) and North American Free Trade Agreement (NAFTA) which includes USA, having huge potential for our exports. The long pending PTA once get expanded will lead to a healthy growth in trade,” said SC Ralhan, president of exporters body, FIEO.
“Apart from the traditional markers like the US and the EU, Latin America region has huge demand that India can cater to. Indian automobiles, drugs, textile, are a huge hit in the region. Though current share of region in overall exports basket is less than 3%, but it is expected to increase to close to 10% with the desired policy push,” the official said.
India’’s exports to Latin America in FY15 stood at $11.5 billion and in FY16 slipped by 34% to $7.5billion.