Financial Daily from THE HINDU group of publications
Tuesday, Sep 21, 2004
Industry & Economy
Trade pact talks with Chile likely in Oct
Kolkata , Sept. 20
CALLING for greater India-Chile two-way trade, especially to correct the balance now in favour of Chile, Mr Jorge Heine, Ambassador of Chile to India, said here on Monday that negotiations are likely to begin in New Delhi next month between the two countries for a preferential trade agreement (PTA).
Participating in an interactive session organised by the CII, Eastern Region, the Ambassador said the initiative was entirely Indian, and some 800 products from the Chilean side and 300 on the Indian side have already been identified as part of the exchange list.
He said the PTA was likely to be signed in mid January during the visit of the Chilean President, Mr Ricardo Lagos, to India. The agreement will be signed by the Department of Commerce, Government of India, and the Directorate of International Economic Affairs, Ministry of Foreign Affairs, Chile.
He said India needs to target the Chilean markets in a big way. Indian exports to that country now include industrial products such as pharmaceuticals, pesticides, textiles and garments and IT products.
Calling for right kind of public policies to facilitate freer trade between the two countries, he said Chile's experience in terms of FTAs has been extremely positive. Chile has FTAs with as many as 38 countries, second only to Mexico.
Pointing out that Chile attracts FDI of around $55 billion now, $4.5 billion every year since 1990, he said there was a huge opportunity for Indian companies to invest in Chile.
Chile's major exports are copper (accounts for some 36 per cent of all copper produced in the world), fresh fruits, fish, etc. Mr Heine said Chile's niche in international trade was in raw materials and commodities. He put the value of Chile's annual exports at $30 billion, nearly half that of India's total exports, with an annual inflation rate of 1 per cent.
Top Indian companies such as Maruti Udyog and Crompton Greaves are major exporters of their products to Chile. Highlighting the huge trade potential in the entire Latin American region, Mr Heine said Chile's exports to India during the first 5 months of this year have already touched $200 million, against the $230 million during the whole of 2003.
Chile has a $150 million trade surplus with India.
Citing the need to step up trade between the two countries in a big way in the near future, he said Chile's overall trade with China during 2003 was $3.1 billion, against India's total trade with the entire Latin American region of $2.7 billion. Some 90 per cent of Chile's exports to India is accounted for by copper. Other products are wines, fish meals etc.
The envoy said Chile was the biggest fresh fruit exporter in the Southern Hemisphere.
He attributed Chile's average annual economic growth of well over 5 per cent to sound macro-economic fundamentals such as low inflation, low public debt, regular fiscal surpluses and innovative public policies.
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