In a bid to increase its foothold in South America, India is working towards a comprehensive preferential trade agreement (PTA) which could be in place as early as next year. As negotiations are underway, the agreement will include both goods and services.
“We hope to see that the PTA with Chile is expanded and will work together closely so that this becomes a reality,” Ashok Das, joint secretary (Latin America & the Caribbean), MEA, told FE.
Outlining major programmes of the NDA government, Das said that there are opportunities for the “businesses from Chile to take part in India’s several programmes including Make In India and Digital India”.
According to Chilean ambassador to India Andres Barbe, “The trade agreement would be in the interest of both the countries. We have tried to explain to the people in Delhi that Chile is not like China. It is a small country. We want Chilean products to come to India and Indian products to reach our markets.”
India is also ready to forge ties with the Pacific Alliance, the world’s eighth largest economy and seventh largest export entity. This will be a major step for India, as now it is an observer state to the Pacific Alliance, a grouping of Mexico, Peru, Chile and Colombia. “The partnership will prove successful for India,” said a diplomatic source, for both the companies already in the associated Latin American countries, as well as for the companies that are extensively looking to expand there.
Similarly, several Indian companies have their presence in Chile in the renewable energy sector, due to the country’s good infrastructure and skilled manpower. Chile has five companies operating in India in shipping, pharmaceuticals and fertilisers, among others. Two companies from Colombia are present in India in the waste management and construction materials industry.
Since 2007, India and Chile have a preferential trade agreement (PTA), but the bilateral trade has fallen to $2.87 billion in 2013. “The main problem is duties. They are very high and our products can’t compete with the Indian products in price,” pointed out a senior diplomat.
Chile has appointed new commercial and agricultural attaches in key Asian and Europe, the Middle East and Africa (EMEA) markets to develop its exports of fruit and other products. The representatives for Indonesia, India,
Thailand, Vietnam, UAE and Morocco, have officially assumed their positions during the course of this year. The Chilean government is keen to export fruits to these markets.
Both Chile and India have established a work plan in plant protection in order to promote technical exchanges, cooperation and improving access to markets of various fruit products. The director of the Agriculture and Livestock Service (SAG) of Chile, Angel Sartori, and assistant secretary of Plant Protection Department of Agriculture and Cooperation of India, Utpal Kumar Singh, have signed a “Plan of Bilateral Technical Cooperation Work” for 2015-2016.
For the Indian market, Association of Exports in Chile (Asoex) believes there is ample opportunity for export growth, centred on tariff reduction and the need to change the conditions of entry for blueberries and avocados. Currently, these require fumigation with methyl bromide at the source, which makes it commercially unfeasible to supply that market. The agreement between the two countries promotes a working agenda, with regular meetings between the Chilean and Indian representatives and the opening of negotiations to improve access for 2015-2016 for cranberries, nuts and avocados and nuts from Chile, and Indian coconuts and bananas.