Ministry of Commerce & Industry (New Delhi), 20 January 2005
INDIA, CHILE SIGN FRAMEWORK AGREEMENT ON ECONOMIC COOPERATION
HISTORIC MOMENT IN BILATERAL RELATIONS, SAYS KAMAL NATH - BIG BOOST TO TRADE WITH LATIN AMERICA
India and Chile have signed a Framework Agreement on Economic Cooperation. Shri Kamal Nath, Union Minister of Commerce & Industry, has described the signing here today as a historic moment, which would open new avenues to boost bilateral trade. The agreement is meant to promote expansion of trade by providing limited preferential access to each other initially. The Minister has said that the signing of the Framework Agreement is part of the strategy to boost India’s exports and improve its share of world trade, which at present is less than 1%. India, of late, has been engaging itself with various regions/countries for preferential trading arrangements (PTA). Besides countries in her immediate neighbourhood, India has entered into a Preferential Trade Agreement (PTA) with MERCOSUR (Brazil, Argentina, Paraguay and Uruguay) which is likely to be operational in April, 2005 and Chile is a major economy in the South American region. Negotiations for PTA with Chile will commence subsequent to the signing as per mutual consultations and would conclude by 2005.
It has also been agreed to set up a Joint Study Group to study the present status of the commercial and economic exchanges between India and Chile and to identify the potential for cooperation between the growing economies of the two countries as well as the bottlenecks both in goods, services and investment and to make recommendations for moving towards a Free Trade Agreement (FTA) or a Comprehensive Economic Cooperation Agreement (CECA) if such, an arrangement is found to be feasible. The Framework Agreement was signed by Shri Kamal Nath on behalf of Government of India and the Chilean Minister of Foreign Affairs, Mr. Ignacio Walker, in the presence of Prime Minister Dr. Man Mohan Singh and the Chilean President, Mr. Ricardo Lagos.
Chile has FTAs with USA, Canada, Mexico, EU and South Korea. It is also an associate member of MERCOSUR and has bilateral trade agreements with the Andean nations and Central America. It is an active member of the Asia Pacific Economic Cooperation (APEC). It is also currently negotiating comprehensive FTAs with New Zealand and Singapore and negotiations are at preliminary stage for FTAs with China and Japan. India’s exports to Chile were US $ 80 million during 2003-04 and imports from Chile were US $ 157 million in the same period. The total global imports of Chile were US $ 17.94 billion during 2003. The region still has a huge potential for Indian exporters as India’s share was just 0.45% of the global imports of Chile during 2003-04.
Later, addressing Business Session in honour of Dr. Ricardo Lagos, Shri Kamal Nath said that considering the potential of the Latin American Region, the government had launched a programme called “Focus : Latin America” to sensitise the Indian industry about the possibility of this region. “This has delivered welcome results and our bilateral trade with Latin America has grown by over 130% since the launch of this programme. The Framework Agreement with MERCOSUR was a step in this direction, and now the Framework Agreement with Chile is testimony to the genuine desire of ours to improve our commercial and economic ties with this region”, he said.