Talks launched on 14 September to widen the 2009 pact, with no product list yet. India’s trade with the four members reached about $21.8 billion in 2025-26 and its deficit about $4.9 billion, four-fifths of it with Argentina, whose sales to India are led by edible oils.
India and MERCOSUR Are Expanding a 450-Line Trade Pact. India’s Deficit With the Bloc Has Nearly Quadrupled in a Year, and 81% of It Is Argentina
On 14 September India and MERCOSUR, the trade bloc of Argentina, Brazil, Paraguay and Uruguay, launched negotiations to widen the preferential trade agreement that has been in force since 2009. The same day they signed a protocol so that electronic certificates of origin are accepted in place of paper. The 2009 pact is narrow: it gives preferences on about 450 Indian and 452 MERCOSUR tariff lines. The launch statements say the talks will cover “new areas of mutual interest”. They do not say which products, and the terms of reference that would define the scope were still being finalised.
The trade the new terms would sit on has changed fast. Taking the four members together, India’s imports rose from about $9.4 billion in 2024-25 to about $13.3 billion in 2025-26, while its exports rose from $8.1 billion to $8.5 billion. The deficit went from about $1.2 billion to about $4.9 billion, nearly four times as large, and four-fifths of it is with one country.
Who sells what to whom
| US$ million | India’s exports | India’s imports | Balance |
|---|---|---|---|
| Brazil | 7,022 | 8,051 | −1,029 |
| Argentina | 1,013 | 4,955 | −3,942 |
| Uruguay | 238 | 290 | −52 |
| Paraguay | 188 | 26 | +162 |
| Four members, 2025-26 | 8,461 | 13,322 | −4,860 |
| Four members, 2024-25 (as reported) | 8,120 | 9,360 | −1,240 |
2025-26: Brazil and Argentina from the Commerce ministry’s Trade Intelligence and Analytics portal, as captured in this blog’s data repository on 18 July 2026; Uruguay and Paraguay from a trade-briefing table that matches the Brazil and Argentina rows, not checked against the portal. 2024-25: official totals ($17.48 billion, of which $8.12 billion exports and $9.36 billion imports) as reported in the press. The two years come from different sources and may differ in vintage. A partial-year press figure for April–October 2025 was $5.22 billion exports and $6.62 billion imports.
Brazil is the larger partner in both directions, and India’s balance with it is close to even: $7.0 billion of exports against $8.1 billion of imports. India’s largest exports to Brazil in 2025-26 were organic chemicals ($0.92 billion), vehicles ($0.83 billion) and pharmaceuticals ($0.60 billion), together about a third of India’s sales there, according to the commerce ministry’s trade data. Argentina is the imbalance. It sold India about $5.0 billion and bought about $1.0 billion.
The composition of Argentina’s sales was not found in the official data available for this piece, but reported figures fit the total. Argentina’s ambassador has said India was the main destination for Argentine soybean oil in 2025, worth about $3.7 billion, with the sunflower complex adding $0.8 billion; trade press reports Argentina overtaking Ukraine as India’s sunflower oil supplier in the 2025-26 marketing year, with a record 530,000 tonnes shipped between September and April. Those figures use different periods, but together they come to most of the $5.0 billion. From Brazil, reported items include crude oil and soybean oil. This is the same trade covered in this blog’s piece on India’s cooking-oil duties.
What an expansion would put on the table
An agreement that broadens preferences does so on both sides of the schedule. For India, the products it sells to the bloc (chemicals, vehicles and parts, pharmaceuticals) are the obvious asks. For MERCOSUR the products at the centre of its sales to India are farm goods, above all edible oils. Cooking-oil duties are a lever India has pulled three times since 2024, raising them to support farmers and then cutting them twice to calm prices. A preference on edible oils for four countries that already supply a large share of the imports would sit on top of that lever, and the question of how it would affect domestic oilseed prices is one that the launch statements do not raise.
Argentina has been pressing for the broader deal, according to trade press, and its sales to India are what a wider pact would most readily grow. Whether India’s own exports to the bloc are wider than the 450 lines now covered, and how much of the current trade uses the preferences at all, are things the published data does not show.
| Question | What was found |
|---|---|
| What does the 2009 pact cover? | About 450 Indian tariff lines and 452 MERCOSUR lines, with preferences from 10% to 100% of the duty. Sources disagree on how many lines sit at each margin, so no split is given here |
| Which products will be added? | Not announced. The terms of reference were still being finalised on 14 September; one outlet says they were completed by 1 October |
| How wide is the aim? | The launch statements say “new areas of mutual interest”; coverage describes the goal as an eventual free trade agreement with goods, services and investment. The October 2025 declaration said the expansion should be “substantial” and cover tariff and non-tariff issues |
| By when? | Brazil’s account of the October 2025 declaration says the parties aim to conclude within a year of the launch, which would be about September 2027 |
| How much trade uses the preferences? | No utilisation figure found for either side |
| What does the electronic certificate of origin protocol change? | It gives electronic certificates the same legal validity as paper ones; it changes paperwork, not tariffs |
Commerce ministry releases (PIB 2310166 and 2310083, announced 14 September 2026, indexed 15 September; PIB 2180058, 16 October 2025) as described in press coverage; PIB pages could not be opened from this blog’s tools.
How it came together
| When | What |
|---|---|
| 25 Jan 2004 | Preferential trade agreement signed, as reported; it takes five years to come into force |
| 1 Jun 2009 | Agreement enters into force: about 450 Indian and 452 MERCOSUR tariff lines |
| 2013 | Request lists to widen coverage exchanged, and still under review years later, according to a WTO committee discussion |
| 7 Oct 2025 | India–Brazil Trade Monitoring Mechanism, seventh meeting, discusses expansion (PIB 2176041) |
| 16 Oct 2025 | India–Brazil joint declaration on deepening the agreement; next step a technical dialogue and a Joint Administration Committee meeting (PIB 2180058) |
| 21 Feb 2026 | Brazil’s President in New Delhi; the commerce minister calls for bilateral trade beyond $15 billion (PIB 2231335) |
| 14 Sep 2026 | Negotiations to expand the agreement launched; protocol on electronic certificates of origin signed (PIB 2310166, 2310083) |
| 1 Oct 2026 | Terms of reference reported completed (a single outlet) |
| About Sep 2027 | End of the one-year aim cited by Brazil |
What would fix this
- The Department of Commerce, with Customs, should publish each year how much of India’s trade with MERCOSUR claimed the preference: shipments, value and duty foregone, by line, for each direction, so the existing 450 lines can be judged before more are added.
- The Directorate General of Commercial Intelligence and Statistics should publish India–MERCOSUR trade at the eight-digit line, flagged as covered or not covered by the pact, so the share of trade the agreement reaches is visible.
- The Department of Commerce should publish the terms of reference and a summary of the request lists by sector once agreed, and run a public consultation, especially with edible oil, pulses, sugar and ethanol producers and the chemicals, auto and pharma exporters who would gain.
- The Department of Agriculture and the Department of Food and Public Distribution should publish an impact note on domestic oilseed and edible oil prices before any preference on vegetable oils is offered.
- The Department of Commerce should publish the negotiating calendar against the one-year aim reported by Brazil, with a note after each round on what was discussed.
These are proposals from this blog, not recommendations any agency has adopted.
Sources and caveats
Commerce ministry releases, titles and dates from this blog’s PIB index: launch of negotiations (PIB 2310166) and first additional protocol on electronic certificates of origin (PIB 2310083), both announced 14 September 2026 and indexed 15 September; India–Brazil joint declaration for deepening the MERCOSUR–India agreement (16 October 2025, PIB 2180058); India–Brazil Trade Monitoring Mechanism (7 October 2025, PIB 2176041; 31 August 2026, PIB 2304804); Brazil’s President’s visit (21 February 2026, PIB 2231335). PIB pages could not be opened from this blog’s tools, so the statements are described from press coverage (Gulf News, ANI, India Briefing, DD India, Drishti IAS and others) and from the Brazilian foreign ministry’s account. 2025-26 trade for Brazil and Argentina is from the Commerce ministry’s Trade Intelligence and Analytics portal and TRADESTAT data in this blog’s data repository (captured 18 July 2026); Uruguay and Paraguay are from a trade-briefing table, unchecked. 2024-25 totals are from press reports of official data, and the $4.9 billion deficit and 81% share are this blog’s arithmetic on those figures. The year-on-year comparison joins two sources and should be treated as approximate. Argentine edible oil figures are from the Argentine ambassador and trade press (Ukragroconsult) and Brazilian crude and soybean oil from calendar 2024 trade-data summaries; none is an official Indian figure, and the periods differ. The 1 October completion of the terms of reference is from a single outlet. Sources disagree on the split of preference margins, which is not used. The Joint Administration Committee, which the 2025 declaration named as the next step, was not found in coverage of the 2026 launch. This article takes no position on whether the agreement should be expanded, or on which products.
About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.
