India eyes free trade with Mexico for better access to Nafta

Mumbai: India and Mexico have set up a high-level group to explore the possibility of entering into a preferential trade agreement (PTA) for improving bilateral trade. The two countries will also sign a bilateral investment protection agreement (BIPA) that will enable India Inc to access North American Free Trade Agreement (NAFTA) - a trading block that groups Mexico, the US and Canada.

"The high level group on trade, investment and economic cooperation that will be set up to ease the flow of trade and investment between the two countries will also look at the possibility of a PTA," commerce and industry minister Kamal Nath said after signing a memorandum of understanding with Mexican economy minister Eduardo Sojo Garza-Aldape.

India, Nath said, was reaching out to all the countries and it has already signed PTA with Mercosur, a grouping of Latin American countries.

He said technical-level team of both countries would be meeting soon to identify impediments in trade and investment between two countries. The formal meeting of the group would be held in the next few months.

Inviting Indian investments, the Mexican minister said his country has free trade agreements with 44 countries and by setting up a base there, companies can have preferential access to economies which account for 70 per cent of the world''s GDP.

He said the potential of Mexico as a gateway to North America was enormous. He also assured to look into the problems faced by Indian businessmen in obtaining long-term visas to Mexico.

"The issue will be sorted out in next two-three months," Sojo said.

Bilateral trade between India and Mexico increased from $251 million in 1999 to $1.5 billion in 2006

Nafta, created in 1994, has become a powerful trade body with strong trading relations with European, African and Latin American markets.

Indian exports to Mexico include engineering goods, chemicals and pharmaceuticals, gems and jewellery, and textiles, while Mexican exports to India are dominated by crude and petrochemicals.

Mexico''s gross domestic product (GDP) is estimated at $768 billion and per capita income is around $8,000.

Investors of Indian origin have pumped in over $1.6 billion over 60 business ventures in Mexico, apart from recent joint ventures in pharmaceuticals and IT sectors by Indian companies.