India hopes to export more generic drugs and textiles to Chile, while the South American country wants to increase its exports of fish, oats, fruit, industrial products and chemicals, both of which have formally exchanged the objectives of extending the bilateral preferential trade agreement (EPZ). “Once the expanded EPZ is in place, the two countries will also consider a possible comprehensive economic partnership agreement, including goods, services and investments,” the official added. Bilateral trade between India and Chile amounts to about $2.5 billion per year. India hopes that drug exports will increase significantly after the expansion of the EPZ, particularly in light of a recent signing of a high-quality generic drug purchase programme signed between India`s STC and Chile`s CENABAST. On 8 March 2006, the two countries signed a preferential trade agreement (EPA) which came into force in August 2007. In 2016, they expanded the scope of the agreement to include other products. Currently, some 2,000 goods are covered by the pact. The two countries have resumed talks for a second extension of the trade agreement, the official said. India`s bilateral trade with Chile has declined slightly, from $2.85 billion in 2017-18 to $2.22 billion in 2018-18.
New Delhi also tried to cooperate in obtaining lithium from Chile to support its efforts to popularize the use of electric vehicles in the country, at a recent meeting between Trade Minister Anup Wadhawan and Chile`s special envoy for Asia-Pacific Eduardo Frez Ruiz-Tagle, a government official said BusinessLine. In 2016, India and Chile extended the scope of the agreement to other products. New Delhi`s increased engagement with Chile is part of its broader approach to strengthening its engagement with Latin America to extend countries` trade interests beyond traditional EU and US markets. India`s bilateral trade with Chile was $2.22 billion in 2018/2019. In an EPA, two trading partners substantially reduce or eliminate import duties on certain products traded between them. Under the expanded EPZ, Chile offered India concessions on 1,798 customs positions (products) with a preferential margin (MoP) of 30 to 100 per cent. This means that, after the implementation of the expanded EPZ, Chile will apply lower tariffs on 1,798 products imported from India than it imposes on its other trading partners in normal trade. Tariffs are reduced by 30-100% (preferential margin) depending on the post office. “Bilateral trade between India and Chile has enormous potential to expand, as it is currently at a low level, mainly due to the distance between countries. Both governments hope that once existing EPZs are expanded, exporters from both countries will have a greater incentive to explore markets,” the official said.
Opportunities to increase investment between the two countries were also discussed. After four rounds of negotiations, Chile and India concluded a preferential trade agreement on 23 November 2005. The Chile-India preferential trade agreement was signed on 08 March 2006. In January 2010, the two countries agreed to deepen the PTA with a view to a much broader agreement. A second meeting on deepening the agreement was held in New Delhi on 5 and 6 August 2010. The third meeting took place on 5 July 2011 in Santiago. The fourth meeting took place in New Delhi on 2 and 3 February 2012. Negotiations on deepening the EPZ concluded in New Delhi on 20 October 2014. Negotiations on the continuation of the extension of a preferential trade agreement between India and the South American nation of Chile are in the final stages and the two countries would include about 400 additional products in the pact to strengthen their economic relations, an official said. In 2003, Chile accepted a proposal from India to negotiate a one-sided lescope agreement (PSA).