Among the LAC countries, Chile was the third largest trading partner of India during 2015-16. India‘s bilateral trade with Chile stood at US$ 2.64 billion with exports at US$ 0.68 billion and imports at US$ 1.96 billion respectively during 2015-16(P).
Chile and India on September 6 signed an agreement on the expansion of India–Chile Preferential Trade Agreement (PTA) Expansion of the Partial Trade agreement, which is expected to considerably strengthen the commercial relations between both the countries.
The agreement was signed by the Commerce Secretary of India, Rita Teaotia and Ambassador of Chile to India, Andrés Barbé here in New Delhi.
The agreement holds great importance as it deepens the agreement signed in the year 2007 which is the only bilateral trade agreement of India with any Latin American country. This Expansion implies the inclusion of around 2,800 products from 474 products which were placed under the original agreement. Furthermore, this expansion has incorporated new chapter corresponding to Technical Barriers to Trade and Sanitary and Phytosanitary Measures, which would contribute to eliminate the non-tariff barriers.
A Preferential Trade Agreement (PTA) between India and Chile was earlier signed in March 2006 and came into force with effect from August, 2007. In the original PTA concluded in March 2006, India’s offer list to Chile consisted of 178 tariff lines the Margin of Preference (MoP) ranging from 10%-50% at 8-digit level and Chile’s offer list to India consisted of 296 tariff lines with MoP ranging from 10% - 100% at 8-digit level.
Under the expanded PTA, Chile has offered concessions to India on 1798 tariff lines with MoP ranging from 30%-100% and India has offered concessions to Chile on 1031 tariff lines at 8-digit level with MoP ranging from 10%-100%. India’s export basket with Chile is diversified and keeping in view the wide variety of tariff lines offered by Chile, the expanded PTA would immensely benefit India.
Among the Latin America & Caribbean countries, Chile was the third largest trading partner of India during 2015-16. India‘s bilateral trade with Chile stood at $ 2.64 billion with exports at $ 0.68 billion and imports at $ 1.96 billion respectively during 2015-16.
"The expansion would be an important landmark in India-Chile relations and consolidate the traditional fraternal relations that have existed between India and LAC countries (Latin American and Caribbean countries)," said an official release of the Ministry of Commerce & Industry.
India’s exports to Chile are diverse which consist of transport equipment, drugs and pharmaceuticals, yarn of polyester fibres, tyres and tubes, manufacture of metals, articles of apparel, organic/inorganic and agro chemicals, textiles, readymade garments, plastic goods, leather products, engineering goods, imitation jewellery, sports goods and handicrafts. Major items of Import from Chile are copper ore and concentrates, iodine, copper anodes, copper cathodes, molybdenum ores & concentrates, lithium carbonates & oxide, metal scrap, inorganic chemicals, pulp & waste paper, fruits & nuts excluding cashews, fertilizers and machinery.
In April, the government had approved expansion of the PTA with Chile. It had said that the expansion of PTA is likely to result in doubling of the exports in the near future.
“This negotiation gave a context to the Economic-Commercial strategy of Chile, in the sense of maintaining an edge on the integration of the big economic zones of the world, particularly the Asia-Pacific. This would practically imply that at least 80% of our exportable offer to India, a market that has more than 1.2 billion people, will have an advantage in this market,” said the Director General of DIRECON, Andrés Rebolledo.
Apart from the products included in this new negotiation, there are other products that had been included and their margin of preference has been increased. The products in this category are copper concentrate, wooden boards, fish meal, molybdenum concentrate, cellulose, newsprint, and pork and bird meat.
India is a market of a big projected economic growth in the world. Today it’s the seventh biggest economy in the world and it is projected to lead the world population growth in the coming years. The important middle class will continue to be important with more access to education and with the growing per capita income leading to increased demand of high value added products.
“This entire context highlights the importance of the work done by this government to strengthen the trade relations and establish the conditions and tools required, that allow us to increase the bilateral trade and reciprocal investments”, pointed out Andrés Rebolledo.