India Brazil Move to Expand Mercosur Trade Pact Beyond Tariffs

Brazil and India complete terms for expanding the Mercosur trade pact, seeking wider market access and cooperation in areas including digital economy, AI, skills, bioeconomy, and defence.

Brazil and India are moving to significantly expand their existing preferential trade agreement with Mercosur, with both sides completing the terms of reference for broader negotiations. The move is aimed at widening market access and strengthening trade and economic cooperation between India and the South American bloc.

Brazilian Minister of Development, Industry, Trade and Services Marcio Elias Rosa said the existing agreement covers only around 450 tariff lines and remains limited in scope. He made the remarks after meeting India’s Commerce and Industry Minister Piyush Goyal on the sidelines of the G20 Trade Ministers’ Meeting in Milwaukee.

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According to Rosa, the completed terms of reference provide a framework for developing concrete proposals for an expanded agreement. The discussions are expected to cover a broader range of products and economic activities than the current preferential arrangement.

India and Mercosur had formally announced the launch of negotiations to expand their Preferential Trade Agreement on September 14. The two sides agreed to identify areas of mutual interest and create greater opportunities for businesses and private-sector participation.

The existing India-Mercosur agreement, operational since 2009, currently provides preferential tariff concessions covering 450 tariff lines from India and 452 from the Mercosur side. India and Mercosur also signed an additional protocol in September to facilitate the acceptance of electronic Certificates of Origin, supporting paperless trade and streamlined customs procedures.

The broader negotiations are also expected to examine cooperation beyond traditional tariff concessions. Areas discussed include the bioeconomy, circular economy and digital economy, along with artificial intelligence, skills development and defence.

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The expansion comes as India and Brazil seek to increase bilateral economic engagement. During Brazilian President Luiz Inacio Lula da Silva’s visit to India in February 2026, the two countries set an objective of doubling bilateral trade to $30 billion by 2030. India-Mercosur trade reached $20.84 billion in 2025, according to India’s Ministry of Commerce and Industry.

With the terms of reference completed, India and Mercosur can now move toward developing detailed proposals for the expanded trade arrangement.