Informist, Tuesday, Jun 18, 2024

--Govt sources: Aim to start free trade pact talks with Chile in Aug

By Krity Ambey

NEW DELHI – The commerce ministry aims to start negotiations with Chile in August for a free trade agreement, two government officials said. Currently, there is a preferential trade agreement in place between the countries.

"The current preferential agreement covers around 2,000 product lines," one official told Informist. "We have been holding internal meetings to gauge how many more product lines can be covered under the FTA (free trade agreement)."

Chile is the second Latin American country with which India will start negotiations for a free trade agreement. Last year, the government resumed discussions with Peru for a free trade pact. The talks were disrupted in 2019.

"Like Peru, the discussions with Chile will also be for an FTA, but not a comprehensive one," the second official said. "As far as the comprehensiveness of the agreement is concerned, parameters like ecosystem-related issues--labour, gender, environment--are not on the table right now."

"Initially the plan was to first conclude (the discussions) with Peru, then start talking to Chile, but now we want to initiate with Chile too," the first official said. "There are some other (Latin American) countries on the list, but we have to go one by one. We cannot start all of them simultaneously."

India's total trade with Chile was $2.70 bln in 2023-24 (Apr-Mar), with exports amounting to $1.18 bln and imports worth $1.51 bln. The major components in India's export basket to Chile are transport equipment, pharmaceuticals, and iron and steel. On the import side, the top commodities sourced from Chile are copper ore, copper electrodes, and molybdenum ore.

India's merchandise exports shrank 3% in 2023-24 to $437.06 bln owing to the slump in overseas demand from traditional markets like the US and the European Union on account of an economic slowdown. The commerce ministry is exploring new export destinations in Latin America to protect Indian exports against such circumstances in future, the second official said.

India's total trade with Latin America in 2023-24 was $35.73 bln, with exports amounting to $14.50 bln. India imported goods worth $21.23 bln from the region last year. End

US$1 = 83.41 rupees

Edited by Rajeev Pai

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