India pursues expansion of PTAs with LAC
The Dollar Business Bureau
India and the Latin American countries (LAC), including Brazil and Peru, are increasing their engagement and discussing ways like signing free trade agreement (FTA) to further enhance trade and investments.
India has signed a pact with Chile in September this year on the expansion of preferential trade agreement (PTA).
“The expanded PTA will have far greater trade coverage in comparison to the agreement signed earlier in March as both sides have offered tariff concessions on a number of lines, the Ministry of Commerce said in a statement.
In order to explore the possibility of a free trade agreement with Peru, India has just finished a joint study group report and both the countries have agreed to a timeline to carry it forward.
“With the completion of the study, India will now ask for internal approvals of the central government to go forward with the discussion on a trade agreement that would include trade in services, trade in goods and investment,” the statement added.
The bilateral trade between India and Peru stood at $1.5 billion in the fiscal of 2015-16. The top 10 commodities that India exports to Peru include cars, motor vehicle, iron and steel products, Bulk Drugs, cotton yarn and fabrics, among others. On the other hand, the imports from Peru consist of gold, fertilizers, bulk minerals and ores, crude and zinc.
India is aggressively involved in the expansion of its PTA with the sub-regional trade bloc - MERCOSUR, which includes Argentina, Brazil, Paraguay and Uruguay and Venezuela. The current India-MERCOSUR pact was inked in January 2004 and it came into effect from June, 2009.
The ministry said that the pact has a limited coverage and includes only 450 tariff lines. Now, both sides have agreed to enhance the coverage to 2500 tariff lines.
Both sides are likely to hold the next round of discussions early next year, it added.
The bilateral trade between India and MERCOSUR bloc was $10 billion in FY2015-16 as compared to $14.24 billion in FY2014-15.
With the expansion of the prevailing PTA, the bilateral trade between the two sides is likely to be doubled, it said.