India planning to include more items under PTA with Mercosur

India planning to include more items under PTA with Mercosur

India is also negotiating a similar pact with South Africa Customs Union (SACU), whose members are Botswana, Lesotho, Namibia, South Africa and Swaziland.

The country already has reduced duties on some products under its preferential trade agreement (PTA) with Mercosur.

"We are thinking of increasing the coverage of items under PTA with Mercosur, which will help in increasing trade ...we will expand it and make it more comprehensive to create an economic linkage," Commerce and Industry Minister Anand Sharma told reporters here.

The PTA is different from the free trade agreement (FTA). In FTA, the two sides reduce or eliminate duties on maximum number of products they trade in, whereas in PTA, the tariffs are not necessarily eliminated, but are lower in comparison with the countries not party to the agreement.

Sharma is on a two-day visit to Bangladesh, leading a business delegation. During his visit, he called on Prime Minister of Bangladesh Sheikh Hasina today. He also held discussions with Bangladesh ministers of Finance, Commerce, Foreign, Food and disaster management. He later addressed Joint Business meeting of FICCI and Bangladesh apex business chamber.

India's exports to South Africa comprise mineral, fuels, automobiles, iron, steel, chemicals, pharmaceuticals, cotton yarn and fabrics. The country''s import include gold, aluminum, phosphoric acid, coal, pulp and waste paper, precious stones, including diamonds.

Sharma also said that India is planning to enhance economic engagement with common market for Eastern and Southern Africa (COMEFA) bloc. This will allow India to access African markets.

During April-September 2010-11, the bilateral trade with South Africa stood at USD 5.3 billion compared to USD 3.7 billion in the previous year. India has signed comprehensive free trade agreement with countries like Singapore, South Korea, Japan and Malaysia.

Commenting on reports that in these free trade pacts the other country is gaining more, Sharma said that the government is "very careful" about the lists while signing such pacts to protect interests of all the stakeholders.

"It is made after consultation with stakeholders. We go through detailed process and these are showing results in the trade figure," Sharma said.