The South American country is of interest to India as it is not only rich in Lithium but also in copper and gold.
For further expansion of the existing Preferential Trade Agreement (PTA), India and Chile have signed the terms of reference.
According to the ambassador of Chile to India Juan Angulo Monsalve “The agreement which was signed in New Delhi seeks to liberalize 80-90 percent tariff lines. Negotiations are on track to open up more lines. We have to exchange a list of the products.”
According to the Chilean envoy “Efforts are on to expedite the negotiations for further expansion of Chile-India Preferential Trade Agreement (PTA). We would like to include the goods and services in the talks for expanded agreement.” Adding, “The idea is to expand the basket and go deeper.”
During a meeting in New Delhi recently the two sides discussed the further expansion of the PTA between the two countries and matters related to the inclusion of more tariff lines/ increasing Margin of Preference (MoP), trade in goods, SPS/TBT, Customs, and Rules of Origin, etc under the existing PTA.
The further expansion of the existing PTA with the South American nation will help India as that country is also a member of the Pacific Alliance (PA). As India is an observer member of the alliance, it is expected that it will help in enhancing engagement with the emerging trade bloc.
Under the current expanded PTA, while India has increased tariff concessions to Chile from 178 tariff lines to 1031 tariff lines, Chile has given concession to India from 296 tariff lines to 1784 tariff lines at 8-digit HS code 2012.
The South American country is of interest to India as it is not only rich in Lithium but also in copper and gold and the exports from Chile to India has been dominated by a few products like copper ores, Molybdenum ores, fresh fruits like apples, blueberries, grapes, pears, etc. Exports from India is more diversified and covers sectors including automobiles, iron and steel, pharmaceuticals, chemicals, leather, apparel, and textiles, etc.
The two countries had inked the first trade agreement in 2006 which came into force in 2007, under which tariff concessions were offered on a limited number of products. And this was expanded after several rounds of negotiations in 2017 which helped in substantially increasing bilateral trade.
Today, duty concessions on as many as 1,798 goods have been offered by Chile to Indian exporters compared to 178 items earlier. India on its part has offered concessions to Chile on 1,031 products as against 296 earlier. This is at 8-digit level with MoP ranging from 10-100 percent.
India has offered tariff concessions on products including meat and fish products, iodine, copper ore, chemical, leather products, and some industrial products, etc. And Chile offers concession on products including agricultural products, chemicals and pharmaceuticals, dyes and resins, and leather products.
According to the Trade Promotion Council of India (TPCI), India’s exports to Chile have increased by 300% while imports from Chile have decreased by 10% between 2007 and 2018.