India-Chile preferential trade agreement

The cabinet has approved expanding the present India-Chile preferential trade agreement (PTA).

Details:

• Under the expanded PTA, Chile has offered concessions to India on 1,798 products and India reciprocated with concessions on 1,031 products.
• Under the proposed expanded PTA, 86% of India's exports to Chile will get covered with concessions, which is likely to result in doubling of our exports in the near future.

Benefits:

• Expansion of India-Chile PTA will enhance the trade and economic relations between the two countries.
• The expansion would be an important landmark in India-Chile relations and consolidate the traditional fraternal relations that have existed between India and Latin American countries.

Background:

The India-Chile PTA signed in March 2006 came into force in August 2007. Bilateral trade registered growth of 58.49% from 2006-07 to 2014-15 after the PTA came into force. India exported $570 million worth of goods to Chile in 2014-15 and imported goods worth $3.08 billion, leading to a trade deficit of $2.5 billion.

What is a PTA?

A preferential trade agreement is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely.