A Preferential Trade Agreement (PTA) between India and Chile has been signed to boost trade relations between the two countries.

The agreement is likely to help Indian pharmaceutical companies tap the Chilean market in a major way. Sources said the Chilean Government is in the process of opening its doors to Indian pharmaceutical industry, to boost its national healthcare programme worth US $ 1 billion. The Government is planning to promote joint ventures between Indian and Chilean companies for a greater availability of Indian products in the Chilean market and enhanced trade flows between India and Chile.

As a first step towards achieving this, the Chilean health ministry, in association with the Indian Embassy in Santiago, had organized a meet on "Indian Pharmaceutical Industry: Opportunities for Chile's Health and Pharma Sectors" in Santiago during June 27 to 29, 2005.

The PTA was signed between SN Menon, commerce secretary, Government of India and Jorge Heine, ambassador of Chile in India on behalf of the Chilean Government, in the presence of Kamal Nath, union minister of commerce and industry, Government of India.

The Union Cabinet had approved signing of the PTA between India and Chile on February 23, 2006. A Framework Agreement on Economic Cooperation was signed between the two countries on January 20, 2005, during the visit of the Chilean President to India, last year. This Agreement envisaged PTA between the two sides. The Framework Agreement also suggested setting up of a Joint Study Group to identify the potential for cooperation between the two countries in trade in goods and services, investments and other areas of economic cooperation.

Chile is one of the major Latin American countries with a GDP of US $ 76.3 billion and a bilateral trade of US $ 53.2 billion during 2004. Its trade surplus was US $ 8.5 billion during the year. Since the early nineties, the Chilean economy has been one of the best performing in Latin America, with an average growth of 5.5 per cent during the period 1990-2003. The growth has been about 6.1 per cent during 2004 and 5.7 per cent during the first six months of 2005. There are no restrictions on imports and exports in Chile.