Chile keen to conclude FTA with India

Chile has been promoting its agro products very strongly into India for the past few years. We witnessed wine tasting and sea food presentations in the Capital by the predecessor of Ambassador, Chile ambMr. Andres Barbe which prompted us to chase him for an interview, but not before we were surprised to get another opportunity to taste Chilean walnuts in Delhi. Finally Mr. Barbe obliged; some excerpts from the talk THE BLUE MOON Editor Amit Mittal had with him are presented here :

India has good relations with Chile, but when we look at the trade figures between the two countries, they are not encouraging at all. The total trade stands at USD 3.1 billion in 2014 of which 2.5 billion is the export from Chile to India. Why are the figures so low?

No doubt we have very good relationship but what you see in large exports from Chile to India is 92 per cent copper and its derivatives.

This means that Chile imports from India merely five hundred million Dollar worth goods?

These are official figures but I am sure that the imports are higher than these figures. We also expect to increase the bilateral trade. We are talking to big Indian companies like Mahindra, Tata and also those into mining. There are textiles, garments and pharmaceuticals as also auto parts being exported to Chile from India. We are also taking specialized vehicles for the mining sector from Mahindra and others. We are inviting partnerships in mining sector for investment in Chile. There are big companies investing in mining and other sectors. To name a few Jindal Steel, TEGA Industries, Bison Pharma, Alchem laboratories, NSL Air Energy and Tata Consultancy in IT sector.

What is the total investment from India?

According to figures available it was USD 320 million in the last year. It is not a large amount, but we are working to increase this. We are expanding our agreement of trade with India. We expect to open new areas of business by increasing the number of products from 400 at present to 2000.

An exhibition named Expo India 2015 was organized in Chile by ITPO in March to give a push to trade. Did it make an impact?

This exhibition was a big success, many people visited the exhibition, about a hundred thousand visitors. Indian products are very popular in Chile.

But, in spite of the popularity of Indian goods, the import of Indian goods to Chile is very small.

It is small. I think that the geographical distance is one hindrance in increasing the trade. A shipment between India and Chile takes about 60 days by sea. A second problem is that due to the distance, business people are not able to meet frequently to conduct business through personal meetings. Chile has a complete open market; there are no duties levied on goods. Compare this to India where a duty of 150 per cent is imposed on wine for example. This makes it difficult to sell the product in India.
Now on 14 November a business delegation is coming to India from Chile which will be led by Vice Minister of Commerce and former President of Chile Frei to promote business ties. They will visit Delhi, Mumbai and Bengaluru. A group of ladies is also coming from small companies. They are motivated to sell or buy from India. They will also participate in the International Fair in November in Delhi.

You have a PTA, not a FTA with India which puts you at a disadvantage. Why?

We do not have a Free Trade Agreement with India. We are trying our best to conclude one. On the other hand, we have FTAs with 64 countries. We have FTA with the European Union which makes it to all the member countries of the Union. We have a team working on the FTA with India regularly. Negotiations have been going on for the past two years. The PTA we have India is a small one; we will expand that too. There are many products that can be added. We hope sometime next year it can be through. We are very keen to have this FTA with India.

We have seen Chilean road shows in Delhi promoting wines and sea foods. Are Chilean wine producers looking at Indian market for their wines?

Chile and many other countries producing wines are looking at the Indian market. Most of us are interested to export our wines. Our wines are very competitive in pricing, but at the same time we uphold quality also. India is producing its own wines also now. So they will like to promote the domestic produce.

Do you think India is being protective in this regard?

No I do not say that it is being protective, but in some sectors of agriculture one has to protect the domestic produce too. We are not opposed to such protection, but we do oppose trade barriers. It has to be a win-win situation for both sides.
About walnuts from Chile, last year we spoke with the Indian Agriculture Ministry about import of walnuts. We reached an agreement in this area and the market is now open. We have walnuts from Chile to India now. There is an exporter of nuts coming in November to India. There is also interest in export of avocado from Chile to India. However, after duties are imposed on such produce they must remain competitive in the market. We are not asking India to eliminate all duties. We want to sign agreement with India in terms of mutual benefit. We can understand reasonable duties on some products.

Chile being a founding-member of United Nations, what is your stand on permanent seat in United Nations Security Council for India?

We agree with the opinion that some deep changes in the Security Council are required. We are supporting India to be a part of that, because it is a new way to see the Council from another part of the world. India and Brazil from BRICS could be the two countries that get our support for the Council. But we are opposed to the right of veto to any nation as one single veto can negate the entire debate.

How do you react to terroristic activity in many parts of the world?

We are completely against terrorism. We never accept terrorism in any form.

In comparison to India, how is Chile’s trade with China?

China is our first trade partner. We have long and close relations with China. We have strategic relations with China. The amount of Chinese investment in South America is amazing. China is a big and important partner for entire South America, not only Chile.
We want to have similar relations with India, but it cannot happen from our side alone, India has to reciprocate.

When do you expect Indian Prime Minister Narendra Modi to visit Chile?

Modi has been Prime Minister for a little more than one year. He began with neighbouring countries, then with countries with close relations and those with which India has strategic relations. Speaking to some Indian diplomats I came to the conclusion that he might come to South America in 2016.

How do you see growth of tourism between India and Chile with the flying time almost 20 hours between the two?

It does take long to fly to Chile. Also tickets are expensive. For instance a ticket can cost over 2000 USD which is the starting price. So if one has to spend just about 3000 on a ticket, he would travel to nearby destination and pay this much money for a full holiday. But it’s not the expensive ticket, Chile has much more to show; the glaciers, dry desert and 2000 volcanoes of which 400 are active.
Hotels in Chile are not as expensive as they are here in India.