India and Chile will begin in August negotiations on the proposed preferential trade agreement to enhance bilateral trade which stood at $320 million in 2003.
Officials from both the sides are expected to meet in August, Chilean Ambassador to India Jorge Heine said in New Delhi.
"The Chilean government has given the go-ahead for negotiations on PTA with India," he said.
The agreement could pave the way for a free trade agreement between the two countries at a later stage, he added.
Initially, about 300 products would be considered under the agreement, he said in his presentation on 'Showcasing existing business opportunities with Chile" at a conference organised by the PHD Chamber of Commerce and Industry and the Embassy of Chile, in New Delhi on Friday.
Bilateral trade between India and Chile increased from $99.3 million in 1998 to about $263 million in 2002. It stood at around $320 million in 2003 and is expected to reach $1 billion by the end of this decade.
However, the Latin American country enjoys a favourable balance of trade, with its exports to India in 2003 being worth $179.5 million against imports from India worth $82.1 million.
Maintaining that the geographical distance between the two countries will not be a barrier, Heine cited the example of China, which is Chile's second largest trading partner with a total trade of $3.1 billion in 2003.
Similarly, Japan ranks as the third largest trading partner with a total trade of $2.9 billion and South Korea as the sixth largest with $1.5 billion worth trade in 2003.
India ranks 22 as Chile's trade partner, Heine said, adding this was quite below the actual trade potential.
Appreciating the fast economic growth in India, he said the two countries complement each other well.
"While India needs raw materials for infrastructure sector which are readily available in Chile, New Delhi's expanding industrial and services sector could easily find a lucrative market in Santiago," he added.
India's exports to Chile include cotton yarn, fabrics, drugs and pharmaceuticals, readymade garments, plastic products, cars, motorcycles, electrical transformers and carpets.
New Delhi's imports from the Latin American nation comprise raw materials such as copper concentrates, copper cathodes, wood pulp, iodine, fresh fruits, wine, salmon fish and almonds.
