India, Paraguay can expand trade with MERCOSUR, says PM Modi

Prime Minister Narendra Modi welcomes Paraguay President, Santiago Pena, at Hyderabad House in New Delhi on June 2, 2025. | Photo Credit: ANI

India and Paraguay can partner in expanding regional commerce in Latin America, said Prime Minister Narendra Modi on Monday (June 2, 2025).

Mr. Modi welcomed Paraguay’s President Santiago Pena Palacios and presented the MERCOSUR trade bloc in Latin America as an arena where India and Paraguay can work together closely. Mr. Pena who is on his first visit to India described India as a “key strategic partner” of his country.

“We see new opportunities for cooperation in areas such as digital technology, critical minerals, energy, agriculture, healthcare, defence, railways, space, and overall economic partnership. We have a Preferential Trade Agreement with MERCOSUR. We can work together to further expand it,” said Mr. Modi in his remarks at the bilateral meeting between the two delegations.

The visit by Paraguay’s President has come in the backdrop of a churn in global commerce after Donald Trump became the U.S. President.

India’s relations with Paraguay dates back to 1961 when bilateral diplomatic ties were established. India opened its embassy in Paraguay’s capital Asuncion in August 2022. MERCOSUR, a trade bloc including Brazil, Argentina, Paraguay and Uruguay was formed in 1991 and a framework agreement was signed between India and MERCOSUR on June 17, 2003. This agreement was followed by the MERCOSUR-India Preferential Trade Agreement (PTA) signed in New Delhi in 2004.

“India with its vast population and global leadership in technology and innovation, represents a key strategic partner for Paraguay. During my official visit, I had a productive meeting with the Prime Minister Narendra Modi, with whom we agreed on the importance of strengthening our bilateral relationship,” said Mr. Pena.

An official, speaking off the record, said Paraguay has the potential to be a reliable regional partner to India as it follows a cautious foreign policy without antagonising any of the major regional and global stakeholders. For India, a special attraction is the natural resources and minerals of Paraguay.

Officials said Paraguay has always been cautious about its foreign policy in a region dominated by Argentina and Brazil. Brazil, under left-leaning President Luiz Inacio Lula da Silva and Argentina’s right-leaning President Javier Milei have been holding pole positions in Latin America and MERCOSUR.

Published - June 02, 2025 10:19 pm IST