South American country Ecuador has expressed interest in negotiating a trade agreement with India to further boost commercial ties between the two nations. Commerce secretary Rita Teaotia led an official delegation to Ecuador and Colombia last week from May 16-19, as the two countries hold huge potential for exports and investments.
Dates are also being worked out for the first round of negotiations for a comprehensive trade agreement with Peru, slated for July. In June, a high-level official delegation from the MEA and the ministry of commerce & industry is expected to attend the Pacific Alliance meet in Santiago, Chile as Chile is pro tempore chair.
Ecuador wants to negotiate a preferential trade agreement (PTA), under which two trading partners reduce or eliminate customs duties on only a certain number of products traded between them.
The matter was recently discussed during the meeting between Teaotia and Ecuador’s vice-minister of trade Humberto Jiménez. The visit by the commerce secretary to Ecuador was made to attend the first meeting of the Joint Economic and Trade Committee (JETCO) and in Colombia to attend a business development cooperation meet. The commerce secretary had led an official and a business delegation to Ecuador and Colombia from May 16-19.
As reported by FE, the protocol for the establishment of the India-Ecuador JETCO was signed in 2015, with the aim of further improving, deepening and strengthening the existing trade relationship between India and Ecuador. The JETCO will function as the primary forum for discussion and other promotional activities on trade and investment issues and will be meeting once in every two years.
According to a statement released by the ministry of commerce and industry, “Ecuador conveyed its interest in initiating the process of negotiations for a PTA in order to strengthen the bilateral relationship for mutual benefit.”
Bilateral trade with Ecuador stood at $716 million in 2015-16. Both the sides also agreed to deepen cooperation between their respective investment promotion agencies to promote a greater exchange of information on investment and business opportunities in both the countries.
Besides an IT centre set up with the help of India, expansion of the trade basket has been on the agenda, as Ecuador offers a privileged location, extended production diversity, great potential in agri-business, fishery, aquaculture, forestry, mining, tourism and services and has a favourable legislation on foreign investment, offers preferential commercial access to different markets and the US dollar is its official currency.
Besides oil, defence and pharmaceuticals, India could look at importing gold and silver from Ecuador.
Almost 99% of the teakwood from Ecuador is exported to India; there are about 300 Indians living in Guayaquil and involved in the teakwood business. A good part of the Ecuadorian exportable supply is concentrated in agricultural products that have huge potential in India.
In Colombia, the commerce secretary held a bilateral meeting with Francisco Echeverri Lara, vice–minister, multilateral affairs, Bogota. Businesses of both countries can explore opportunities in sectors like telecommunication, infrastructure, hydrocarbons, IT, pharma, textiles and auto.
“As Colombia is exploring to diversify its export basket, they have shown interest for cooperation in sectors of agriculture and food processing,” it added. Bilateral trade with Colombia stood at $ 1.7 billion in 2015-16.
India’s commercial relationship with the region has over the past decade increased multifold, reaching a peak of $50 billion in trade and $20 billion in Indian investment in the region. Latin America is now India’s largest destination of car and motorcycle exports and the region is becoming a hub for Indian IT companies.