India has placed a growing emphasis on expanding its international trade relations via FTAs (Free Trade Agreements) to increase access to markets and improve supply chains while broadening the number of country partners for trade. Recent discussions surrounding a possible India–Argentina FTA have gained significance as both nations wish to bring South Asia and Latin America closer together in terms of Economic Cooperation. Although a complete bilateral FTA project remains unfinished at this time, and these ongoing talks – with an emphasis on MERCOSUR trade bloc areas – serve to illustrate the significant and developing strategic and commercial importance of developing additional trade relations between India and Argentina.
Background of India–Argentina Trade Relations
India’s relationship with Argentina has expanded significantly over the last 10 years. The total amount of trade between the two countries was $6.4 billion by 2022, which makes India one of Argentina’s largest trading partners; furthermore, there were temporary decreases due to draught or other economic issues in Argentina, but the total amount of bilateral commerce subsequently rebounded to approximately $5.2 billion in 2024, suggesting that bilateral commerce between India and Argentina is picking up again.
India is a significant importer of soybean oils and other agricultural goods from Argentina, while Argentina imports pharmaceuticals and chemical products from India; these complementary trading relationships create a strong basis to support further integration of their respective economies.
Existing Trade Framework: India–MERCOSUR PTA
At present, there isn’t a separate Free Trade Agreement (FTA) between India and Argentina but rather a Preferential Trade Agreement (PTA) established between India and MERCOSUR nations which includes Argentina, Brazil, Uruguay and Paraguay that was initiated in 2009. The PTA provides limited market access for 450 tariff lines through reduced tariff rates on those lines.
The current agreement between India and MERCOSUR is rather basic compared to many modern FTAs; they usually also include services, investment protections, digital trade and regulatory cooperation between the countries involved in an FTA, which is why both India and Argentina have been looking for ways to expand their PTA or enter into a full FTA to increase trade and investment activity between their countries.
Why an India–Argentina FTA Matters
1. Diversity of Trade Partners
India is developing a broad network of trade partners across a number of regions and countries as a means of further developing the global economic integration process. To this end, the Government has completed several free trade agreements (FTAs) with developed countries and is currently negotiating additional FTAs to enhance India’s exports and increase the resilience of India’s supply chain. An agreement with Argentina would enable India to expand its trade links into new markets, in addition to long standing traditional trade partners in Europe, the United States, and East Asia.
2. Access to Critical Minerals & Energy Resources
Argentina is part of what is referred to as the “Lithium Triangle” (consisting of Argentina, Bolivia, and Chile) in South America where lithium, a key mineral used in the manufacture of electric vehicle batteries and renewable energy technologies, is produced. A deeper level of trade with Argentina could enhance India’s ability to access these critical minerals and would thereby assist India in transition to renewable energy and achieve its manufacturing goals.
3. Agricultural and Food Security
Argentina is one of the world’s largest exporters of soybeans, edible oils, and other agricultural products. Improved trade relations would provide India with a greater ability to produce agricultural products and to import key agri-food products.
4. Growth Opportunities for Indian Exports
Indian manufacturers would benefit from the reduction in tariffs and formalities associated with free trade agreements by accessing new export markets through the following industries:
• Pharmaceuticals
• Textile
• Automotive and Automotive Parts
• Information Technology and Electronic Services
• Engineering Product Exporters
Free trade agreements can significantly improve the ability for Indian businesses to compete in Latin American shops.
Key Areas Likely to be Covered in a Future FTA
- Goods traded internationally will see lower rates of tariffs or taxes paid by the buyer. This should mean lower prices for consumers.
- Services traded internationally will provide new opportunities for Indian Information Technology, Financial Services, and Professional Service companies.
- A very important issue is how countries around the world encourage cross-border investments into their countries by Companies (also referred to as Foreign Direct Investment).
- The purpose of this section is to stop countries from taking another country’s trade and passing it off as their own or taking advantage of countries’ genuine trade relationships.
- Simplification of customs procedures and logistics (the methods of moving goods) helps to facilitate trade.
- The emergence of new types of commerce, particularly digital commerce and the transfer of technology from one nation to another.
Challenges in Negotiating an FTA
- Varied Tariff Structures: Argentina has high tariffs in some sectors to protect their domestic industry, which could affect the negotiation.
- Regional Negotiation Limitations: Argentina is part of the MERCOSUR economic bloc and therefore negotiates trade agreements with other member countries collectively, thus delaying bilateral negotiations.
- Agricultural Sensitive Issues: Agriculture is sensitive to both countries and negotiations may require careful consideration of domestic interest.
- Distance & Logistics: Transportation costs and logistics could decrease the amount of trade unless shipping routes improve with trade facilitations.
Importance Of the India-Argentina FTA
The India-Argentina free trade agreement would benefit both countries through increased bilateral trade while enhancing India’s interaction with Latin America. It would enable Indian companies to enter the larger South American region’s market and would provide Argentine firms with more access to an expanding Indian economy. In addition, the FTA will allow for greater cooperation in various areas such as energy, mining, agriculture, technology, and innovation, which will ultimately help both countries develop stronger long-term economic and strategic partnerships.
The India-Argentina FTA represents a significant milestone in strengthening economic ties between the Asian continent and Latin America. Although negotiations are continuing to progress via the India-MERCOSUR framework, the possible rewards of an FTA between India and Argentina will greatly enhance opportunities for trade diversification, energy independence, and increased market access.
As global commerce continues to evolve, the growing economic partnership between India and Argentina can play a major role in forming future economic partnerships between emerging economies.
Sweety Tuli is a legal content writer at Legallands.com, specializing in corporate advisory, legal research, and strategic business compliance. Her work focuses on simplifying complex legal concepts for entrepreneurs, investors, and professionals navigating multi-jurisdictional frameworks, particularly across India and the UAE.
With a keen understanding of corporate law, regulatory affairs, and policy reforms, Sweety contributes insightful analyses on topics such as company formation, CEPA-driven trade policies, taxation frameworks, intellectual property, and digital compliance.
She is passionate about bridging the gap between legal interpretation and business practicality—helping organizations align their operations with legal governance, ethical standards, and global best practices.
Through her articles at LEGALLANDS LLP, Sweety aims to make legal knowledge more accessible, strategic, and actionable for businesses operating in a rapidly evolving regulatory environment.
