Context: The President of Paraguay is on a three-day state visit to India in June, 2025. India and Paraguay are looking at new opportunities to strengthen economic partnership in several areas, including digital technology and critical minerals.
Relevance of the topic:
Prelims: Location of Paraguay; Key facts about MERCOSUR.
Mains: India’s economic & strategic partnership prospects in South America.
India-Paraguay Relations
- Diplomatic Relations: India-Paraguay bilateral diplomatic ties were established in 1961. The countries share cordial relations with shared principles and values- democracy, human rights, rule of law, freedom of expression, peace, respect for sovereignty and territorial integrity.
- Bilateral Trade: India-Paraguay bilateral trade stood at USD 477 million in FY23.
- India's imports: soya oil and related products, iron and steel, aluminium, and animal products.
- India’s exports: motor vehicles, agrochemicals, auto parts and pharmaceutical products.
- Economic cooperation: The two countries can expand cooperation in areas such as digital technology (Digital Public Infrastructure), critical minerals, energy, agriculture (AgriStack), healthcare, defence, railways and space.
- Paraguay is rich in natural resources and minerals and has the potential to be a reliable regional partner to India.
- India can share the expertise in the Digital Public Infrastructure with Paraguay.
- India has a Preferential Trade Arrangement with South American trading bloc MERCOSUR. India and Paraguay can partner in expanding regional commerce in Latin America.
The two countries are integral parts of the Global South with shared challenges- such as cybercrime, organised crime, and drug trafficking.
MERCOSUR:
- MERCOSUR is a Latin American trade bloc including Brazil, Bolivia, Argentina, Paraguay and Uruguay formed in 1991.
- MERCOSUR members agree to the free movement of goods and services between member countries.
- MERCOSUR-India Preferential Trade Agreement (PTA) signed in 2004.
Location of Paraguay
- Paraguay is a landlocked country in south-central South America.
- It shares its borders with three countries: Bolivia, Argentina and Brazil.
The President’s first visit will add new strength to the pillars of trust, trade, and close cooperation in the relations and will also add new dimensions to India-Latin America relations.