India’s Big Move With Brazil: Strategic Alliance To Counterbalance America’s Influence

International News: India and Brazil, the two countries facing the highest tariffs from the US, are now preparing to come together. According to media reports, government sources have indicated that India may hold a virtual meeting with the MERCOSUR trading block next week. The Free Trade Agreement (FTA) will be discussed in this meeting. India already has a Preferential Trade Agreement (PTA) with MERCOSUR since 2004. MERCOSUR is a regional trade organization of South American countries led by Brazil, whose other members are Argentina, Uruguay and Paraguay.

According to the report, India is looking for many new export markets so that the impact of the economic slowdown in developed countries and the tariffs recently imposed by the US can be reduced. This year, Prime Minister Narendra Modi met the presidents of Brazil, Argentina and Paraguay. Apart from this, the Vice President of Brazil is also going to visit India next month. Let us tell you that the US has imposed the highest tariff of 50 percent on India and Brazil.

Nations Seeking New Trade Partners

According to sources, Latin American countries are looking for new trading partners and consider India a big market. India also considers opening the market to these countries relatively safe, as the range and quantity of their products is limited, due to which there is less possibility of harm to India's domestic industries.

All options are open to increase trade, from increasing the 450 product lines under the existing PTA to 4,000 or entering into a comprehensive FTA, which will have conditions like movement of skilled professionals and rules of origin, so that dumping or trans-shipment by third countries can be prevented.

The economy is $2.94 trillion

Mercosur countries have a share of more than 67% of the total economy of South America. The total economy of South American countries is $ 4.38 trillion, of which the economy of Mercosur member countries is $ 2.94 trillion. Sources also said that discussions are going on to convert PTA into FTA within the Mercosur block. A comprehensive FTA will give Indian exporters access to the large markets of Mercosur countries.

Apart from this, it will also give India an opportunity to enter new markets in the Caribbean and Pacific regions, where MERCOSUR countries are often used as trans-shipment hubs.