A Framework Agreement to Promote Economic Cooperation between India and Chile was signed on January 20, 2005. The Framework Agreement envisaged a Preferential Trade Agreement (PTA) between the two countries as a first step. The Framework Agreement also provides for a Joint Study Group to go into the issues relating to a Free Trade Agreement between the two sides.
As a follow up to the Framework Agreement, a PTA was finalized after four rounds of negotiations between the two sides. The last round of negotiations was held in New Delhi in November 2005. The PTA has two Annexes relating to the list of products on which the two sides have agreed to give fixed tariff preferences to each other and three Annexes relating to the Rules of Origin, Preferential Safeguard Measures and Dispute Settlement Procedures.
While India has offered to provide fixed tariff preferences ranging from 10% to 50% on 178 tariff lines at the 8 digit level to Chile, the latter have offered us a similar range of tariff preferences on 296 tariff lines at the 8 digit level. The products covered in the mutual offers account for more than 90% of the value of total bilateral trade amounting to US$ 447.54 Million, which took place between the two countries during 2004-05.
The products on which India has offered tariff concessions relate to meat and fish products (84 tariff lines), rock salt (1 tariff line), iodine (1 tariff line), copper ore and concentrates (1 tariff line), chemicals (13 tariff lines), leather products (7 tariff lines), newsprint and paper (6 tariff lines), wood and plywood articles (42 tariff lines), some industrial products (12 tariff lines), shorn wool & noils of wool (3 tariff lines) and some others (7 tariff lines).
Chile’s offer covers some agriculture products (7 tariff lines), chemicals and pharmaceuticals (53 tariff lines), dyes and resins (7 tariff lines), plastic, rubber and miscellaneous chemicals (14 tariff lines) leather products (12 tariff lines), textiles and clothing (106 tariff lines), footwear (10 tariff lines), some industrial products (82 tariff lines) and some other products (5 tariff lines).
The Agreement was approved by the Cabinet in its meeting held on February 23, 2006, and consequently the PTA has been signed on March 8, 2006.
Joint Study Group: The Framework Agreement between India and Chile, provided for a Joint Study Group (JSG) to identify the potential for cooperation between the two sides in trade in goods and services, investments and other areas of economic cooperation. The first meeting of the Joint Study Group was held in November 2005. The draft reports prepared by Chile and India were discussed during the meeting. Both sides agreed to submit their findings to their governments with a view to consider further action on the Free Trade Agreement