India inks agreement to expand trade with Chile.

NEW DELHI: India has signed an agreement with Chile to expand the India- Chile Preferential Trade Agreement (PTA), marking a 10-fold jump in the number of products to be traded on concessional duty rates.

"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," said the commerce department in a release.

The Union Cabinet had approved the expansion of the PTA in April under which 86 per cent of India's exports to Chile will get concessions.

Under the expanded PTA, Chile has offered concessions to India on 1,798 tariff lines with duty cuts that are 30-100 per cent lower than the existing customs duty for various products. Similarly, India has offered concessions to Chile on 1,031 tariff lines with duties 10 per cent-100 per cent lower than the present import duties.

A PTA between India and Chile was signed in March 2006 and came into effect from August 2007.

In the original PTA, India's offer list to Chile consisted of 178 tariff lines and Chile's consisted of 296 tariff lines to be traded with duty concessions.

India's bilateral trade with Chile stood at $2.6 billion with exports at $0.68 billion and imports at $1.96 billion respectively in FY16. India's exports to Chile comprise transport equipment, pharmaceuticals, tyres and tubes, apparel, chemicals, textiles, readymade garments and leather products. Major items of import from Chile are copper ore and concentrates, iodine, copper anodes, copper cathodes and fertilisers.

Expanding LAC footprint

Expanding the PTA with Chile is a step towards tapping the Latin American and Caribbean Nations (LAC) market and the government is awaiting the report of the Joint Study Group on trade with Peru to take a call on the framework for a trade agreement.

"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," the department said.

Similarly, India has begun the process of expanding its PTA with the Mercosur trade bloc in which the number of products on which tariff concessions would be given is likely to increase to more than 3,000 from 450 at present with more agricultural products getting covered. Mercosur consists of Argentina, Brazil, Paraguay and Uruguay. Venezuela, a Mercosur member, is not a party to the agreement.

Source : economictimes.indiatimes.com