EXTENDED INDIA-CHILEAN PTA APPLICABLE
India and Chile have achieved another milestone in business relations with an agreement on the expansion of the Indo-Chilean PTA. This agreement was signed on September 6, 2016, and it is now being implemented on May 16, 2017. Central Cabinet Cabinet had approved the extension of PTA in April 2016.
Domestic products such as textiles and chemicals would get greater market access in Chile as the expanded preferential trade agreement between India and the South American nation will come into effect from May 16
Both parties will benefit greatly from expanded PTA, as it will increase the scope of the large number of tariff lines offered to both sides, which will facilitate greater bilateral business.
India and Chile had already signed the Preferential Trade Agreement (PTA) on March 8, 2006, which came into effect from August 2007. There were limited number of tariff lines in the original PTA, whereas now the two parties have increased tariff concessions given to each other. The list offered by India includes only 178 tariff lines, while Chile's offer list includes 296 tariff lines of the 8-digit level.
While expanded PTAs are high, Chile has offered concessions to India on 1798 tariff lines (such as agricultural items, chemicals, pharmaceuticals, plastics, textiles, apparel, iron and steel items, copper machinery, to Indian exporters as compared to 178 items earlier) with margin of preference (MOP) of 30% to 100%. At the same time, India has offered concessions to 1031 tariff lines with MOP in the range of 10% to 100% on Chile 8 points. When negotiations were completed, these tariff lines were based on HS 2012. With effect from January 1, 2017, with the introduction of the HS 2017 nomenclature, both parties have made changes in the agreement relating to tariff concessions corresponding to the HS 2017 nomenclature for issuing the notification.
LAC is the fourth largest trading partner of India after Brazil, Venezuela, and Argentina in the region. According to the Department of Commerce data, India's bilateral trade increased to $ 364.645 million during 2014-15, compared to $ 265.535 million in 2011-12. However, bilateral trade decreased by 27.60% in 2015-16 and total turnover was $ 263.99 trillion with exports of $ 67.932 million and $ 196.067 million. The main reasons for the decline in bilateral trade are softening of prices of crude oil and international commodities.
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