Chile and India agree to reduce bilateral trade tariffs
Chile and India have agreed to significantly expand their existing trade agreement and will considerably increase the number of products it covers, following talks between delegations in New Delhi.
Pablo Urria (left) and Dammu Ravi
The two countries will now build upon their 2007 Partial Scope Trade Agreement (AAP) and extend tariff reductions to 2,800 agricultural products, up from the current 474.
The new products to be added include cherries, onions, avocados, grapes, kiwifruit, mandarins, tomato puré, and grape and apple juices.
Key figures amongst the two delegations were Chile's General Directorate of International Economic Relations (DIRECON) economic director Pablo Urria and India's Ministry of Industry and Trade deputy secretary Dammu Ravi.
"Although the AAP has allowed more than 90% of our exports to receive lower tariffs, it was important to continue developing our commercial relationship," Urria said in a release.
"So in 2009 we decided to begin negotiations for an expansion of the trade agreement, which will include new products to receive preferential tariffs, and for a deepening of matters related to Rules of Origin, Sanitary and Phytosanitary Measures (MSF) and Technical Trade Barriers (OTC)."
He added that AAP's consolidation was part of Chile's wider strategy for more commercial integration into Asia, specifically for countries with whom no comprehensive trade agreements had yet been established.
Under the new agreement, India's trade preference margin will increase to between 50-80%, while for Chile it will be 80-100%.
The negotiations were also successful in establishing either full or partial exemptions for a total of 2,807 tariff lines. Of the total figure, 1,023 correspond to products being sent from India to Chile, and 1,784 to other way round.
"The Indian economy is characterized by high tariff costs. In this context, improvement in preferences granted by India and the inclusion of new Chilean products covered under the agreement are even more relevant, especially when you consider that the average tariff price by India reaches more than 30% of the case of agricultural products," Urria said.
With the negotiations now complete, all that's left is for both countries to agree upon a date for when the agreement will be signed and when it will come into effect.
Chile's total exports to India rose 83% in the first semester of 2014, making up the fall experienced in 2013. India is currently the seventh biggest export destination for Chile, receiving 3.9% of shipments.
Photo: DIRECON
