New Delhi, June 5: In a bid to enhance trade with Mercosur, an alliance of Argentina, Brazil, Uruguay and Paraguay, government on approved the framework trade agreement with it, a move which would enable India to negotiate for a free trade area in the long run.
The framework would strengthen the existing relation between Mercosur and India, promote the expansion of trade and provide the conditions for creation of a free trade area between Mercosur and India, an official spokesman told reporters here after a Cabinet meeting.
"The signing of the framework agreement will pave the way to enter into preferential trade agreement as the first step and ultimately to negotiate a free trade agreement in long-term interest," he said, adding that this agreement would boost Indias trade to Mercosur in particular and Latin America in general.
Presently India has a total trade of $1,392.23 million with Mercosur during 2001-02, of which exports to four-nation alliance were worth $626.49 million while imports from them stood at $765.74 million.
The region still has a huge potential for Indian exporters as India's share is just 0.83 per cent of the global imports of Mercosur during 2001.
India's major items of exports to Mercosur include drugs, pharmaceuticals and fine chemicals, transport equipment, inorganic/organic/agro chemicals, cotton yarn fabric, made-ups among others while major import items into India include edible vegetable oils, metalliferous ores, metal scrap and non-electrical machinery, the spokesperson said.