India is ramping up efforts to boost trade ties with Latin America, targeting broader market access across the region’s key economies. A trade delegation is set to meet representatives from MERCOSUR this month to explore upgrading the existing Preferential Trade Agreement (PTA) into a Free Trade Agreement (FTA).

MERCOSUR, comprising Brazil, Argentina, Paraguay, and Uruguay, accounts for over 67% of South America’s economy. While the current PTA with India, signed in 2004, covers around 450 tariff lines, an FTA would open doors to larger markets within MERCOSUR and newer opportunities in the Caribbean and Pacific regions, many of which use MERCOSUR nations as trade hubs.

The push comes amid global geopolitical uncertainty, economic slowdowns in developed countries, and recent US tariff hikes. India is also seeking to strengthen supply chains for critical minerals and petroleum products through deeper engagement with Latin American economies.

Beyond MERCOSUR, India is pursuing trade pacts with Peru and Chile. Peru aims to finalise a trade agreement in 2025, with eight rounds of talks already completed, while India and Chile began negotiations in May 2025 to expand their existing PTA into an FTA.

India is further eyeing concessions for exports such as engineering goods, leveraging reduced shipping distances via new port infrastructure on Peru’s Pacific coast to bolster its presence in the region.

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