India-MERCOSUR Trade Agreement: Strengthening Ties with Uruguay

The potential expansion of the India-MERCOSUR trade agreement presents a significant opportunity for deepening economic ties, particularly with Uruguay, which currently holds the presidency of the South American trading bloc. In an exclusive discussion with FinancialExpress.com, the Ambassador of Uruguay Alberto Guani highlighted the critical importance of enhancing the existing trade framework to include modern sectors such as services, goods, and mobility, as well as exploring new areas of cooperation.

Following are excerpts from an exclusive interaction:

Current Status and Prospects

The India-MERCOSUR trade agreement has been a pivotal platform for economic interaction between India and the member countries of MERCOSUR. As Uruguay presides over the bloc until December 2024, a crucial meeting is set for the end of August in Montevideo to discuss the agreement’s expansion. Ambassador Guani expressed optimism that discussions will progress during Uruguay’s presidency, potentially leading to a comprehensive agreement that aligns with modern trade needs.

According to the ambassador Uruguay’s strategic role in this process cannot be understated. The inclusion of Bolivia into MERCOSUR is expected to be a positive development, potentially facilitating smoother negotiations. The expansion of the agreement to cover services and goods, as well as improved mobility, is seen as a critical step towards modernizing the trade relations between India and MERCOSUR. This modernization would signal a stronger, more intense business relationship, enhancing the economic partnership.

Trade and Economic Cooperation

Currently, the trade volume between India and Uruguay is marked by a significant imbalance. India imports approximately USD 75 million worth of goods from Uruguay, primarily wood, while Uruguay imports around USD 400 million worth of Indian products, including tractors, cars, and two-wheelers. The Ambassador emphasised the importance of balancing this trade, with hopes for increased Indian imports from Uruguay. The potential for growth is particularly evident in agricultural trade, pending the approval of a Memorandum of Understanding (MOU) on Agriculture. This MOU, which has been under consideration for almost a year, could unlock numerous opportunities in the agricultural sector.

New Areas of Cooperation

Beyond traditional trade, both nations are exploring cooperation in emerging sectors. Uruguay has identified several areas where collaboration with India can be deepened, including information technology, renewable energy, space technology, robotics, drones, and satellites. These sectors represent the future of bilateral cooperation, offering avenues for innovation and technological advancement.

Additionally, the possibility of a Social Security Agreement (SSA) remains under discussion, awaiting clearance from the Indian side. This agreement would facilitate smoother movement and social security benefits for professionals working between the two countries.

Upcoming Diplomatic Engagements

Secretary East Ambassador Jaideep Mazumdar’s visit to Uruguay on September 16, for political consultations, underscores the significance of this bilateral relationship. This visit aims to discuss a range of issues, including the expansion of trade agreements and exploring new sectors for cooperation. The agenda will focus on transforming good intentions into dynamic and practical engagements.

In conclusion, the expansion of the India-MERCOSUR trade agreement, coupled with deepened cooperation with Uruguay, represents a promising future for both nations. As both countries continue to explore new sectors and modernise their trade relations, the partnership is poised to strengthen, benefiting from Uruguay’s strategic position and India’s growing influence in global trade.

Source: Financial Express

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