Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ News / India/  Commerce ministry finalizing terms of reference for free trade with Chile
BackBack

Commerce ministry finalizing terms of reference for free trade with Chile

The two sides aim to expand trading relations beyond agriculture and goods, to include digital services and investment under the deal

According to the commerce ministry's Niryat portal, exports to Chile stood at $1.10 billion till February 2024. (Photo: Bloomberg)Premium
According to the commerce ministry's Niryat portal, exports to Chile stood at $1.10 billion till February 2024. (Photo: Bloomberg)

New Delhi: The Union commerce and industry ministry is finalizing the terms of reference (ToR) for a free trade deal with Chile, before the two nations start talks aimed at boosting bilateral economic ties, two people aware of the matter said.

The two sides aim to expand trading relations beyond agriculture and goods, to include digital services and investment under the deal, a Comprehensive Economic Partnership Agreement (CEPA), they said.

This comes in the backdrop of India trying to secure lithium mines in Chile. Both countries signed a preferential trade agreement (PTA) in 2005, which is a limited trade pact.

Given that India is aiming to explore new markets to diversify its exports, the finalization of the ToR will help in moving ahead with negotiations with Chile, thereby allowing India to gain greater access to the South American region, one of the persons cited above said.

Terms of reference refer to the purpose and structures of a negotiation agreed to work together to accomplish a shared goal.

The talks are likely to start in a few months after the new government is formed at the Centre.

Queries sent to spokespersons of the commerce ministry and Chilean Embassy remained unanswered till press time.

According to the commerce ministry's Niryat portal, exports to Chile stood at $1.10 billion till February 2024, which represents a marginal increase from $1.06 billion in the corresponding months of the previous fiscal year (2022-23). Total imports from the South American nation amounted to $1.27 billion till April-January 2024.

Major commodities exported to Chile include engineering goods, drugs and pharmaceuticals, textiles, ceramic products, glassware, spices, fruits, vegetables, and petroleum products. In return, India receives copper ore, halogens, sulfate, chemical wood pulp, walnuts, etc.

India is aiming to boost exports of maize, fresh or dried bananas, groundnuts, oil cakes, and other agricultural items to Chile, which shares borders with Peru, Bolivia and Argentina.

According to ITC Trade Map data, Chile's exports to India have increased at an annualized rate of 10.1% over the last 27 years, rising from $93.1 million in 1995 to $1.26 billion in 2022.

“The comprehensive trade agreement with Chile will allow India to access lithium, which is an important component for transitioning from conventional sources of energy", the second person said.

The government has also signed a non-disclosure agreement with the Chilean state-run company ENAMI to secure supplies of lithium. Chile, Argentina and Bolivia make up the 'Lithium Triangle,' which holds some of the largest deposits of lithium worldwide.

Lithium is crucial to India's transition to sustainable energy sources and reducing its carbon footprint. The mineral plays a vital role in electric vehicles, battery manufacturing, mobile phones, and other energy storage solutions.

Also Read | Commerce ministry shifts focus to push fresh fruits and vegetables to US and EU

 

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 16 Apr 2024, 05:38 PM IST
Next Story footLogo
Recommended For You