PARAGUAY was working to sign a preferential trade agreement with India to boost export to the landlocked country and provide Indian companies opportunities to tap the South American markets, senior officials said on Sunday.
The country has been in discussions with India as part of the Southern Common Market (MERCOSUR) created by Argentina, Brazil, Paraguay and Uruguay. “In all, we have identified 460 products with export potential, like soybean and organic cotton. We hope to bring 605 products form India under the Preferential trade Access Agreement once the pact is signed between the two countries,” said Paraguay’s Ambassador to India Genaro V Pappalardo.
According to him India is currently exporting pharmaceutical, agricultural machinery, automobiles spare parts and spices to the Latin American country. “ We want to have joint venture and technology transfer in communications, agriculture and food processing, ayurveda and biodiesel sectors. We see a huge potential of Punjabi businessmen investing in our country or either going for a joint venture with existing Paraguay players,” said Mr Pappalardo.Currently, trade transaction between India and Paraguay is only worth $20 million. “We want to increase the volume of our trade, particularly, the soybean import to India,” he said.
A few Indian companies from the pharmaceutical and food processing sectors have invested in the country to get benefits from the free trade zones and access the Latin American markets. “A businessmen doesn’t have to pay VAT (which is 10%) and is also exempted from excise duties for the first five years. Also, depending on the investment and company, the government gives additional incentives. In addition to this, the tax burden in Paraguay is 9.9 % compared to 21.4% in Brazil and 20.4% in Argentina,” said Mr Pappalardo.
He further added that considering the average cost of land which varies between $800 and $1,000 per hectare and availability of young labour (70 % of the population is below 30 years), Punjab farmers can find a huge opportunity to invest in the country. Realising the importance of a direct flight from India to Asunción (capital of Paraguay) Mr Pappalardo said he intended to bring the matter to before the Indian government. “The Amritsar International Airport could be from where we could start the flight,” he said. Dr Saryen Yadav, along with his associates from the US, plans to invest close to $500 million over the next five years in the Latin American country.
Setting up a food processing unit of soybean and establishing a private ayurveda university are high on his agenda. “It is a virgin market to explore and invest. With the establishment of the units there we have a big market to cater to from Brazil to Argentina,” he said.