India and Chile have signed the Terms of Reference (ToR) for a Comprehensive Economic Partnership Agreement (CEPA) as both sides aim at strengthening bilateral relations ahead of the 1st round of negotiations scheduled for 26th to 30th May in New Delhi.The mutually agreed ToR were signed by Juan Angulo, Ambassador of Chile in India and Vimal Anand, Joint Secretary with India’s Department of Commerce, also India’s Chief Negotiator for India-Chile CEPA.
The CEPA aims to build upon the existing Preferential Trade Agreement (PTA) between the two nations as well as deepen cooperation in sectors like critical minerals, digital services, MSMEs and investment promotion.
The India-Chile PTA was signed in 2005 as a follow-up to a Framework Agreement to Promote Economic Cooperation. India is also in talks with another big economic bloc MERCOSUR; comprising of Brazil, Argentina, Paraguay, and Uruguay; to widen the existing PTA.
An expanded PTA was subsequently signed in September 2016 and became effective from 16th May 2017. In April 2019, both the countries agreed to pursue further expansion of the PTA with three rounds of negotiations till 2021.Also Read: India’s September trade gap narrows as gold imports slowedTo deepen their economic engagement, both sides expressed their intention to negotiate a CEPA to unlock the full potential of their trade and commercial relationship, boosting employment, facilitating investment promotion, and cooperation and exports, as suggested by the Joint Study Group established under the Framework Agreement. The JSG report was finalized and signed on 30th April 2024. Chile’s President Gabriel Boric Font had also recently visited India, from 1st to 5 April.With an increase in geopolitical uncertainty due to ongoing conflicts and economic slowdown in many developed countries, India is looking to secure supply chains for critical minerals and petroleum products with potential trade deals with several Latin American countries.In December 2024, government sources had told CNBC TV18 that India is aiming to get duty concessions for exports of engineering goods and other items to Latin American countries, as it aims to benefit from lessened distance for freight due to China’s new port on Peru’s Pacific coast.Also Read: Rupee extends declines on escalating tensions between India-Pakistan(Edited by : Juviraj Anchil)
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