India & Chile Sign Terms of Reference for to start CEPA negotiation

The Indian government signed a Terms of Reference for the proposed Comprehensive Economic Partnership Agreement (CEPA) with Chile in New Delhi on May 9, 2025. The agreement will kickstart the negotiation between the two countries on CEPA, which will broaden and deepen their trade and investments. 

The agreement was signed after India and Chile agreed to launch negotiations on CEPA during Chilean President Gabriel Boric Font's visit to India from 1 to 6 April 2025.

Who signed the Agreement? 

• The Chief Negotiator for India-Chile CEPA, Vimal Anand, signed the agreement in New Delhi. He is Joint Secretary, Department of Commerce, Union Ministry of Commerce & Industry.
• From Chile, the agreement was signed by Juan Angulo, the Chilean Ambassador in India.

Upgradtion of India-Chile PTA to CEPA 

• India and Chile signed a Preferential Trade Agreement (PTA) in March 2006. Later, more goods were added to the PTA, which was expanded and implemented on 16 May 2017. 
• Both countries want to expand their trade and investment ties and upgrade the PTA to CEPA.
• The CEPA will cover critical minerals, MSME (Micro Small and Medium Enterprises), digital services, cross-border investment, and other areas.
• Both countries will hold the first round of discussions on CEPA in New Delhi from 26 to 30 May 2025.

What are PTA and CEPA 

Preferential Trade Agreements (PTA) and comprehensive economic partnership agreements (CEPA) are agreements between two countries or blocs that promote trade and investment by reducing or eliminating tariffs on selected goods and services. 

The CEPA is more comprehensive than the PTA.

Preferential Trade Agreement(PTA)

• In a PTA, two or more countries or trading blocs agree to reduce tariffs on an agreed-upon number of products.
• The participating countries prepare a list of goods called positive goods.
• Tariffs are reduced on the goods that are in the positive list.
• It does not cover all the goods, services, investments or movement of labours.

Comprehensive Economic Partnership Agreement (CEPA)

• CEPA is also known as the Economic Cooperation and Trade Agreement (ECTA).
• It includes agreements on goods, services and investment. 
• It also covers intellectual property rights (IPR) agreements, labour movements, etc.
• It is more comprehensive than the PTA.

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