India, Chile to begin negotiations for comprehensive trade deal in May | Current Affairs | Vision IAS

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India, Chile to begin negotiations for comprehensive trade deal in May

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India and Chile: Comprehensive Economic Partnership Agreement (CEPA)

India and Chile are set to embark on their first round of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in New Delhi from May 26-30. This initiative aims to significantly upgrade their bilateral trade relationship.

Terms of Reference (ToR) Agreement

  • The ToR for the CEPA was signed by Juan Angulo, ambassador of Chile in India, and Vimal Anand, joint secretary in India's Department of Commerce.
  • The agreement aims to expand upon the existing preferential trade agreement (PTA) and includes sectors such as: 
    1. Digital services
    2. Investment promotion and cooperation
    3. MSME (Micro, Small, and Medium Enterprises)
    4. Critical minerals

Trade Relationship and History

  • In 2024, India had a $1.3 billion trade deficit with Chile, with exports worth $1.1 billion and imports totaling $2.4 billion.
  • A Framework Agreement on Economic Cooperation was signed in January 2005, and a PTA followed in March 2006.
  • The PTA was expanded in September 2016 and took effect on May 16, 2017.
  • Further expansions were pursued with three negotiation rounds between 2019-2021.

Future Goals and Joint Study Group (JSG) Report

  • The CEPA aims to deepen economic engagement and unlock the full potential of the trade relationship, boosting employment and facilitating investment and export promotion.
  • The JSG report, finalized on April 30, 2024, outlines these objectives.

Recent Developments

  • During Chilean President Gabriel Boric Font's visit to India (April 1-5), both leaders reaffirmed the importance of trade and commerce in their bilateral relationship.
  • They welcomed the ToR signing and the start of CEPA negotiations to establish a balanced, ambitious, and comprehensive agreement for deeper economic integration.
  • Tags :
  • India Chile
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