Cabinet okays preferential trade pact expansion with Chile

NEW DELHI: The government has approved the expansion of the Preferential Trade Agreement (PTA) with Chile under which 86% of India's exports to Chile will get covered with concessions.

“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 government in an official statement.

A PTA between India and Chile was signed in March 2006 and came into effect from August 2007. Post this agreement, trade dynamics changed with bilateral trade rising 58.49% from $2.3 billion in 2006-07 to $3.65 billion in 2014-15.

The PTA, in its current form, seeks to cut tariffs between 10-50% on 296 Indian products exported to Chile and 266 Chilean products imported by India. The agreement benefitted 91% of Indian exports and 98% of imports from Chile. The Indian sectors that benefitted from the PTA include cars, textiles, chemicals, pharma, engineering and agricultural machinery. Among the Chilean products that benefitted from the PTA are copper, cellulose, newsprint, iodine, fish meal, wood boards and planks and salmon.

Under the expanded PTA, Chile has offered concessions to India on 1,798 tariff lines with India reciprocating on 1,031 tariff lines.