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Chile moves closer to sealing trade agreement with India

Dow Jones | Wednesday, 8 September 2010

Chile moves closer to sealing trade agreement with India

By Anthony Esposito, Dow Jones Newswires

SANTIAGO -(Dow Jones)- Chile is a step closer to sealing a free-trade agreement with India, the remaining economic superpower it has yet to sign one with.

The Andean nation currently has various types of free-trade agreements with 58 countries, including the U.S., China, and the European Union, representing 60% of the global population.

Chile and India signed a preferential trade agreement that has been in force since 2007, making Chile India’s first trade partner in Latin America. The two countries now look to deepen their investment and trade ties.

"I firmly believe that we need to set the foundation to be able to take this relationship to the next level....There are tremendous amount of complementarities between both our economies," India’s Commerce and Industry Minister, Jyotiraditya Scindia, told Dow Jones Newswires.

Despite being on opposite sides of the world and having vastly different economies, India and Chile are both on firm footing following the global financial crisis.

Expansion in manufacturing and services recently drove India’s economy to its fastest growth in more than two years in the April-June quarter, an 8.8% rise year-on-year, while robust domestic demand and investments following February’s earthquake have fueled Chile’s recovery.

The Andean nation expanded 6.5% on the year in the second quarter, and is expected to grow between 5.0% and 5.5% for the year despite the devastation wrought by the quake and tsunami it spawned.

As the nations move towards a free-trade agreement, Chile and India will first sign an agreement to avoid double taxation and a bilateral investment promotion agreement, both of which are currently in the works, the minister said.

Among other cross-border investment plans, Chile’s Sociedad Quimica y Minera de Chile SA, one of the globe’s leading fertilizer and specialty chemical producers, recently said it was considering building a plant in India.

Meanwhile, India’s state-run Hindustan Copper Ltd. is looking to buy mining assets in Chile.

Chile is one of the world’s leading exporters of natural resources such as copper, woodpulp, fishmeal, nitrates, iodine, molybdenum and lithium.

 source: Dow Jones Newswires