New Delhi, Feb 21 (PTI) India is working to expand the preferential trade agreement with South-American nation bloc Mercosur to further promote trade and investment between the two regions, Commerce and Industry Minister Piyush Goyal said on Saturday.

Mercosur is a trade bloc in Latin America comprising Brazil, Argentina, Uruguay, and Paraguay. The India-Mercosur PTA came into effect on June 1, 2009.

This PTA has limited coverage and contains only 450 tariff lines or products. Both sides are looking at expanding the scope of this pact to a full-fledged agreement.

"The Mercosur region is particularly important for us, and we are working to expand our India-Mercosur preferential trade agreement, to improve market access, to grow investments on both sides, to have technology partnerships, and to engage in sports, education, culture," he said here at Ficci's India-Brazil Business Forum.

The minister also said that the bilateral trade between India and Brazil is growing, but it is "sub-optimal".

It grew by 25 per cent to over USD 15 billion in 2025.

"We have to be significantly more ambitious," Goyal said, adding Brazil is India's largest trading partner in Latin America and the Caribbean region.

"Our bilateral engagement has continued to deepen in several areas, such as defense, energy, agri, agrochemicals. We are also expanding cooperation in health and pharma, energy, including renewable energy, critical minerals, defense, and aviation," he said.

Further, the minister invited Brazilian businesses to explore investment opportunities in India.

He said India is on track to surpass Germany in the next two years or so, to become the world's third-largest GDP.

This growth, he said, is driven by reforms in taxation, logistics, manufacturing, digital infrastructure, reducing compliance burden, making it easier to do business.

"When we think of Brazil, we think of its rich natural resources, minerals like niobium, lithium and iron ore are vital for shaping the future of technology and global energy transition," Goyal said.

Brazil's aerospace, automotive and digital technology industries are rapidly evolving, offering abundant opportunities for collaboration.

"All of this comes together to make Brazil our strategic partner in global supply chains. Together, we have the potential to reshape global supply or value chains with resources innovation and a forward looking vision," the minister added.

India and Brazil on Saturday set an annual bilateral trade target of USD 20 billion in the next five years and signed a pact for cooperation in the area of critical minerals following wide-ranging talks between Prime Minister Narendra Modi and Brazilian President Luiz Inacio Lula da Silva.

Speaking at the Forum, the Brazilian President said there is huge potential to boost bilateral trade between the two countries.

"That is a lot of growth, but it is still not much if we take into consideration Brazil's and India's size," he said, adding both countries are now looking beyond powerhouses like Europe,the US, Japan and China.

There is a potential to take the bilateral trade to USD 30 billion, he added.

"We decided to change this because the potential, you know, of political, economic, cultural, scientific, technological integration between Brazil and India is something which is huge in its dimension," Silva said.

He added that businesses will benefit from extending the visa validity for business interns from five to ten years.

India is a bioenergy market that is growing and Brazil has expertise with ethanol and fuel engines, he said.

"Brazil has at least 26 per cent of the world's reserves of critical minerals...We want to attract the processing chain for this wealth...The agreement that we signed today with India goes in this direction," the President said.

He also said that Brazil is not only looking at increasing its exports, but also imports from India.

"We want to invest and consolidate our presence in India with the transfer of technology and personnel capacity building. With the agreement signed by Embraer with the Adani and Mahindra groups, these agreements are going to allow for the production of commercial and defense aircrafts here in India," he said.

Areas such as clean energy, electrical mobility, health, aerospace, semiconductors and digital innovation hold huge potential for increasing cooperation between the two nations. PTI RR RR MR