India-Chile PTA to be signed soon; exports set to double.

An expanded India-Chile Preferential Trade Agreement (PTA) will be signed in New Delhi next week. Confirming this, senior officials told FE: “Under the expanded PTA, 86% of India’s exports to Chile will get covered with concessions, which is likely to result in doubling of our exports in the near future.”

Talking to FE, Andres Barbe, ambassador of Chile to India, said, “The inking of the agreement, which was scheduled for later this year, has now been preponed. Instead of Eduardo Frei, extraordinary and plenipotentiary ambassador on special mission to the Asia-Pacific of Chile coming here for the signing, it will be at an ambassadorial level in New Delhi.” Barbe said, “The trade agreement would be in the interest of both the countries. We want Chilean products to come to India and Indian products to reach our markets.” Chile has offered tariff concessions on agricultural products, organic & inorganic chemicals, pharmaceuticals, plastic & rubber articles, textiles, apparel, articles of iron/steel & copper, machinery & equipment.

India’s export basket with Chile is diversified and keeping in view the wide variety of tariff lines offered by Chile. India has offered concessions to Chile on 1031 tariff lines at an eight-digit level with a margin of preference (MoP) ranging from 10% to -100%. Under the expanded PTA, of the 1,798 tariff lines, Chile has offered 100% MoP on 556 tariff lines, 80 % MoP on 736 tariff lines, 60% MoP on 291 tariff lines and 30 % MoP on 215 tariff lines.

Today, Chile is India’s 4th largest trading partner in the LAC (Latin America and Caribbean) region. India’s bilateral trade with Chile stood at $2.64 billion during 2015-16 with exports of $0.68 billion and imports $ 1.96 billion. A PTA between India and Chile was signed in March, 2006. The said PTA came into force with effect from August, 2007. During 2006-07, Chile was ranked 51st as an export destination for India. Bilateral trade during 2006-07 was $2.3 billion. Trade dynamics changed after the PTA came into force from September 2007. Bilateral trade registered a growth of 58.49% from 2006-07 to 2014-15. Bilateral trade during 2014-15 stood at $3.65 billion with exports at $0.57 billion and imports at $3.08 billion respectively. “Almost 91% of trade between the two countries is in commodities, specifically copper, which is close to $1.7 billion, comes to India,” Barbe said. Copper is the main import commodity on which the Indian side has offered 50% MoP. “The MoP of 50% on copper has been offered to Chile keeping in mind that the refined copper is an intermediary, which is an important input for many sectors of our economy. The demand for this item is expected to grow exponentially beyond current domestic capabilities,” said a government official.

Since 2007, India and Chile have had a PTA, but bilateral trade has fallen to $2.87 billion. “In 2009, we agreed to start negotiations for widening the agreement, which would include new products, subject to tariff preferences, and deepening in matters related to Rules of origin, sanitary & phytosanitary measures, and technical barriers to trade (TBT),” the diplomat added.

Andrés Rebolledo, director general for international economic relations, foreign affairs ministry, Chile, “Considering the significant size and growth of the Indian market, there is great potential for fruits from Chile to increase their market share. The expanded PTA will increase preferential tariffs for both countries. Chilean fruits that will benefit from this process include avocadoes, clementines, grapes, apricots, cherries, nectarines, raspberries, cranberries and kiwis.”

Source : financialexpress.com