Union Cabinet gives nod to expansion of India-Chile Preferential Trade Agreement
The Union Cabinet has given its approval for expansion of India-Chile Preferential Trade Agreement (PTA) between both countries.
Decision in this regard was taken by the Union Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi.
Key facts
- Under the expanded PTA, India has offered concessions to Chile on 1031 tariff lines at 8-digit level with Margin of Preference (MoP) ranging from 10 to 100%.
- While, Chile has offered concessions to India on 1798 tariff lines with MoP ranging from 30 to 100%.
- Under it, 86% of India’s exports to Chile will get covered with concessions, which is likely to result in doubling of its exports in the near future.
- Expanded PTA would also immensely benefit India, keeping in view the wide variety of tariff lines offered by Chile as India’s export basket has diversified with Chile.
Background
- The Preferential Trade Agreement (PTA) between India and Chile was signed in March 2006 and it came into force with effect from August 2007.
- Since then the trade dynamics have changed between both countries after the PTA came into force.
- Bilateral trade between both countries has registered a growth of 58.49% from 2006-07 to 2014-15.
- During 2014-15, the bilateral trade stood at US 3.65 billion dollars with exports at US 0.57 billion dollars and imports at US 3.08 billion dollars respectively.
Comment
The expansion PTA would be an important landmark in India-Chile relations as both countries have friendly relations. It would help to enhance the trade and economic relations between the two countries and also help India to consolidate the traditional fraternal relations that have existed with Latin American Countries (LAC).
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Month: Current Affairs - April, 2016