Paraguay Paraguay-India - Page 8

paraguay PARAGUAY BOOSTING BUSINESS RELATIONSHIP WITH INDIA BY HUMA SIDDIQUI* P araguay’s steady growth is primarily driven by the export-oriented agriculture sector, followed by hydroelectric power generation. This, together with good macroeconomic management, has allowed the South American nation to generate a fi scal surplus of 0.6 percent of GDP on average for the 2005-2018 periods and maintain public debt below 27 percent of GDP. The country is seeking India’s cooperation for building its infrastructure and solutions for diversifying its economy. The only country in the world which has a transparency law regarding public information is looking to India for collaborations and ventures in various sectors including education, health, agriculture, renewable energy, and machinery. To attract investors, the landlocked country is planning to give more tax incentives to companies wanting to invest there. The government of Paraguay is pursuing policies such as 8 • PARAGUAY 2019 Law 60/90, Maquila Regime, incentives for Forestry together with low tax benefi ts in to attract investments to promote development. Foreign companies in Paraguay have a simple tax regulation, with a reduced amount of taxes and rates. The Indian business houses can look at Paraguay as a gateway to Pacifi c Alliance member countries including (Peru, Chile, Colombia, and Mexico) and MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) which together make up for 80 percent of market share in the region. “It is the least bureaucratic business environment among the MERCOSUR countries. Import tariff s on inputs and capital goods are the lowest in the commercial block. The country also has diff erentiated rules of origin that allows the aggregation of up to 60 percent of origin not from MERCOSUR,” says Gustavo Rojas, Researcher at the Centre of Analysis and Dissemination of the Paraguayan Economy (CADEP).