The Hindu Business Line : Mercosur an attractive destination for Indian exporters: Study

A STUDY by the Federation of Indian Chambers of Commerce and Industry (FICCI) and EXIM Bank on the potential for enhanced India-Mercosur trade in pharmaceutical, chemical and petrochemical products, reveals that the size of the markets for these products in the Mercosur countries is very large - making it an attractive destination for Indian exporters.

In contrast, the relative size of the Indian import markets for most pharmaceutical, chemical and petrochemical products were not comparatively too large to attract big exporters from the Mercosur countries.

However, the factor that would encourage Mercosur exporters is that India's imports of these products are buoyant across a wide range of pharmaceutical, chemical and petrochemical products - including plastic tube/pipe/hose, monofilament rods/sticks, explosives/pyrotechnics, perfume/cosmetics, and radioactive material.

An investigation of the actual trade potential for pharmaceutical, chemical and petrochemical products between India and the Mercosur countries showed that 691 products had the potential to improve trade. Of these, , 34 products had the potential for increasing trade by more than $10 million. Of the remaining, 220 products had a potential for trade varying from $ 1 million to 10 million and in the case of another 225 products, the potential for trade varied between $100,000 and $1 million. However, the potential was less than $ 100,000 for 282 products.

The study further states that in 2002-03 India's exports of pharmaceuticals, chemical and petrochemicals products to Mercosur countries were valued at $481 million while the imports were valued at $36 million.

Given the large size of the gross domestic product (GDP) and export markets it is very clear that the two partners would play an important role in the growth of South-South trade, it indicates. Prospects for trade are most optimistic in the case of those products, wherein both partners have improved their global competitiveness.

Another study on India-Mercosur trade in creative industries done by FICCI, reveals that the Indian music industry could tap the Mercosur markets through better packaging, marketing and taking pro-active measures for tapping the cross-regional and cross border potential of Indian music. Further, the Indian entertainment industry is growing beyond the markets that have so far been largely restricted to people of Indian origin across the globe. Indian software companies have also forayed into Latin America and the average annual growth rate of software exports for the past five years is 62.3 per cent.

The FICCI delegation led by the Chamber President, Mr Y.K. Modi, is going to participate in the UNCTAD `Regionalism and South-South Cooperation: The Case for Mercosur and India', to be held at Rio de Janeiro.

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