Expansion of India-Chile PTA will benefit SME exporters as well as importers: FIEO

New Delhi, Sep 6 (KNN) As India signs an agreement with Chile on the expansion of India–Chile Preferential Trade Agreement (PTA), experts opine that the move will give further advantage in margin of preference to India SMEs exporting to Latin America and particularly to Venezuela.

An agreement on the expansion of India–Chile Preferential Trade Agreement (PTA) was signed between India and Chile in a meeting held between Rita Teaotia, Commerce Secretary and Andrés Barbé González, Ambassador, Embassy of Chile on 6th September, 2016.

Under the expanded PTA, Chile has offered concessions to India on 1798 tariff lines with Margin of Preference (MoP) ranging from 30%-100% and India has offered concessions to Chile on 1031 tariff lines at 8-digit level with MoP ranging from 10%-100%. India’s export basket with Chile is diversified and keeping in view the wide variety of tariff lines offered by Chile, the expanded PTA would immensely benefit India.

Talking to KNN, Ajay Shai, Director General, Federation of Indian Export Organization (FIEO) said, “India- Chile PTA was running earlier too which they have now expanded. In the PTA now, India has got the advantage of around 1700 tariff lines and 1000 tariff line advantage has been given by India to Chile.”

The will increase the competitiveness of Indian MSMEs who export to Latin America and particularly to Venezuela as they will get further advantage in margin of preference, Sahai said adding that same is in the case of imports in which the manufacturers will be benefitted. 

PTA between India and Chile was earlier signed on March 8, 2006 and came into force with effect from August, 2007. In the original PTA concluded in March 2006, India’s offer list to Chile consisted of 178 tariff lines the Margin of Preference (MoP) ranging from 10%-50% at 8-digit level and Chile’s offer list to India consisted of 296 tariff lines with MoP ranging from 10% - 100% at 8-digit level.

Among the LAC countries, Chile was the third largest trading partner of India during 2015-16. India‘s bilateral trade with Chile stood at US$ 2.64 billion with exports at US$ 0.68 billion and imports at US$ 1.96 billion respectively during 2015-16(P).

India’s exports to Chile are diverse which consist of transport equipment, drugs and pharmaceuticals, yarn of polyester fibres, tyres and tubes, manufacture of metals, articles of apparel, organic/inorganic and agro chemicals, textiles, readymade garments, plastic goods, leather products, engineering goods, imitation jewellery, sports goods and handicrafts. Major items of Import from Chile are copper ore and concentrates, iodine, copper anodes, copper cathodes, molybdenum ores & concentrates, lithium carbonates & oxide, metal scrap, inorganic chemicals, pulp & waste paper, fruits & nuts excluding cashews, fertilizers and machinery. (KNN Bureau)