India and Chile on Wednesday signed in New Delhi a Preferential Trade Agreement as part of initiatives to increase trade and investment between the two countries.
"The PTA strategically positions Chile to access and to capitalise on the Indian market and its technological assets. This marks a watershed in ties between the two countries as it will impart a new dimension to our trade relations in times to come," Commerce Minister Kamal Nath said.
"Chile has been on our main trade partner in Latinamerica and our government is keen in promoting relations between the two countries", added SN Menon.
The agreement, signed by Commerce Secretary SN Menon and Chilean Ambassador Jorge Heine, provides tariff preferences ranging from 10 to 50% on 178 products to Chile and a similar range of preferences on 296 items to India.
It would benefit 98% of items being exported by Chile to India and 91% of the goods being exported by India to Chile.
The Indian products, which would benefit include textiles, chemicals, pharmaceuticals, engineering and agricultural machinery while Chilean products include copper, newsprint, iodine, fish meal and salmons.
The two sides have also discussed the draft reports of the Joint Study Group and agreed to submit their findings to consider further action on a Free Trade Agreement.
The PTA is consequent to the signing of a Framework Agreement on Economic Cooperation on January 20, 2005 during the visit of the Chilean President to India.
The Framework Agreement also provided for a Joint Study Group to identify the potential for cooperation in trade in goods and services, investments and other areas.
India is one of the fastest growing economies in the world and figures among the world's top ten. India-Chile trade during 2004-05 stood at 525 million US dollars. Almost 35% of Chilean trade is with Asian countries mainly China, South Korea and Japan.