Initiatives by the Government of India to improve India-Latin trade relations

Government of India has initiated FOCUS LAC program with a purpose to increase Trade Relations with Latin American countries. This program includes; Enhanced Interaction – With a motive to enhance inter-action, the Government of India and Government of Latin American countries have also set up joint commissions, which are:

The Indo-Argentine Joint Commission; Indo-Argentine Joint Trade Committee; Indo-Mexican Joint Commission; Indo-Brazilian Commercial Council; Indo-Cuban Joint Commission; Indo-Cuban Trade Revival Committee; Indo-Suriname Joint Commission; and Indo-Guyana Joint Commission.

The Federation of Indian Chamber Of Commerce and Industry (FICCI) and The Associated Chambers of Commerce and Industry Of India (ASSOCHAM) will be shouldered with the responsibility of increasing interaction with their counterparts in the Latin American Countries (LAC)  The Confederation of Indian Industry (CII) will have regular interaction with their counterparts in the LAC region, with whom they have signed Memorandum of Understanding (MOUs).

Special Cell

The CII and FICCI will have a separate cell to look after the trade promotion and development matters, pertaining exclusively to LAC region and The Latin America Committee in CII would be activated. The India-Latin America Interest Group in FICCI would also be initiated. CII and FICCI would organize seminars at main centres in India and the LAC on the potential of enhancing trade. This would, then be followed by major product-specific buyer-seller meetings (BSMs). (Source:  Ravi Kumar, Visiting Professor, IIFT, New Delhi.)

Preferential Trade Agreement (PTA) with Mercosur

A Framework Agreement was signed between India and MERCOSUR[1] on June 17, 2003 at Asuncion, Paraguay. The aim of this Framework Agreement is to create conditions and mechanisms for negotiations in the first stage, by granting reciprocal tariff preferences and in the second stage, to negotiate a free trade area between the two parties in conformity with the rules of the World Trade Organisation.

As a follow up to the Framework Agreement, a Preferential Trade Agreement (PTA) was signed in New Delhi on January 25, 2004 to expand and strengthen the existing relations between MERCOSUR and India and to promote the expansion of trade.

The major product groups covered in the offer of MERCOSUR are food preparations, organic chemicals, pharmaceuticals, essential oils, plastics & articles thereof, rubber and rubber products, tools and implements, machinery items, electrical machinery and equipments. The major products covered in our offer list are meat and meat products, inorganic chemicals, organic chemicals, dyes & pigments, raw hides and skins, leather articles, wool, cotton yarn, glass and glassware, articles of iron and steel, machinery items, electrical machinery and equipments, optical, photographic & cinematographic apparatus.[2]

Preferential Trade Agreement (PTA) with Chile[3]

A Framework Agreement to Promote Economic Cooperation between India and Chile was signed on January 20, 2005. The Framework Agreement envisaged a Preferential Trade Agreement (PTA) between the two countries as a first step. The Framework Agreement also provides for a Joint Study Group to go into the issues relating to a Free Trade Agreement between the two sides.

While India has offered to provide fixed tariff preferences ranging from 10% to 50% on 178 tariff lines at the 8 digit level to Chile, the latter have offered us a similar range of tariff preferences on 296 tariff lines at the 8 digit level. The products covered in the mutual offers account for more than 90% of the value of total bilateral trade amounting to US$ 447.54 Million, which took place between the two countries during 2004-05.