Expansion of India – Chile Preferential Trade Agreement (PTA)

India and Chile have signed a pact on the expansion of the India–Chile Preferential Trade Agreement (PTA), which is expected to considerably strengthen the commercial relations between both the countries.

Details:

• Chile has offered concessions to India on 1798 tariff lines with margin of preference (extent to which duties are lower than those offered to other countries) ranging from 30% to100%.
• India’s offer to Chile is on 1,031 products with a margin of preference between 10% and 100%.

Background:

India and Chile first signed a PTA in March 2006 but it was limited in scope. India’s offer list to Chile in the initial PTA consisted of 178 tariff lines with a margin of preference ranging from 10% to 50%. Chile’s offer list to India comprised 296 tariff lines with margin of preference ranging from 10% to 100%.

What is a PTA?

A preferential trade agreement is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely.