India and Chile sign agreement for Preferential Trade. In a significant step towards furthering economic cooperation, India and Chile have concluded a Preferential Trade Agreement (PTA) under which tariffs would be cut up to 50 per cent on 296 Indian products exported to the South American country.

Tariffs would also be cut on 266 Chilean products imported by India under the agreement concluded after four rounds of negotiations, two each in Santiago and New Delhi.

The agreement will profit 91 per cent of Indian exports and 98 per cent of imports from Chile, the Embassy of Chile said in a statement on Thursday.

It stated that under the pact, both sides agreed on tariff cuts between 10 and 50 per cent on 296 Indian products exported to Chile and 266 Chilean products imported by India.

The Indian products which will benefit from the PTA include cars, textiles, chemicals, pharma, engineering and agricultural machinery.

Among the Chilean products to benefit from PTA are copper, cellulose, newsprint, iodine, fish meal, wood boards and planks and salmon. The PTA is to be ratified by the two countries before it can come into effect.

Trade between India and Chile has been growing fast over the past few years, touching a record $ 525 million (Rs 23.62 crore approximately) in 2004 and expected to be much higher this year.

Chile's exports grew by 90 per cent in 2004, reaching $ 425 million (Rs 19.12 crore approximately) and resulted in India rising in Chile's 21 export market to 17. India's exports to Chile accounted for $ 100 million (Rs 4.5 crore appoximately).

The Chilean Embassy stated that the country has a favourable trade balance with India, but the exports from the latter are more diversified, with over 1000 products.

India and Chile have also undertaken a joint study on the potential and likely impact of a Free Trade Agreement (FTA) between the two countries.

It concluded that an FTA would have a significant and positive impact on bilateral trade, and it would be beneficial to both the countries. 
 
The Economics Times