A burgeoning demand for high-quality foreign fruits in India, coupled with lower import duties allowed under a bilateral trade deal, means that fruit exporters from Chile are aggressively eyeing the Indian market.
This is playing out the most in the apple segment, on which New Delhi has announced higher tariffs when imported from the United States. With the US being India's largest source of the red fruit, at least a few major fruit importers have made contact, seeking import prices for apples and other fruits, a trader based in Santiago, Chile, said.
"Since domestic supply cannot keep up with demand, we are always on the lookout for newer partners. Higher tariffs on US imports will force the industry to search for other major suppliers with world-class quality and high assured volumes, especially since apple imports have gone down in the past one year due to various issues," Kartik Jalan, CEO of Kailash Agro, said.
A $52-million shipment of fruits reached India from Chile in 2017-18. Fruits are the nation's fourth-largest export segment to India. This segment has grown by more than 30 per cent for the past 2 years.
Of this, apples make up the largest share at $24 million, followed by walnuts and kiwis. Last year, India had also provided market access to blueberries and avocados from the South American nation, which is the global export leader for these fruits. As a result, the country is expected to make serious inroads into the Indian market.
"Current fruit exports to India are pegged at 30,000 tonnes per year, with apples making up 79 per cent of shipments by volume. Chilean fruit exports reach more than 83 million consumers every year across 100 countries and India's share in our exports has continued to grow annually. Currently, Asia makes for about 20 per cent of our exports, with India at the second place behind China," Charif Christian Carvajal, marketing director for Asia for Chilean Fruit Exporters Association, said.
Bilateral trade pact has benefited Chile
Although Chile is the third-largest exporter of kiwi globally, Iran and New Zealand currently pip exports from the South American country where India is concerned. However, the $7.54 million worth of Chilean Kiwi imported last year saw a more than 75 per cent growth. Chile has 50 per cent tariff advantage on Kiwis as compared to other countries under India's existing bilateral trade deal with the country.
Under the India-Chile Preferential Trade Agreement (PTA), signed back in 2005, trade has grown by more than 11 per cent until last year when the treaty was expanded. While the level of growth has made Chile the fourth-largest trade partner for India in the Latin American and Caribbean region, imports from Chile -- mostly copper and organic chemicals -- have mostly benefited while India's exports have stagnated.
The expanded PTA has a wider coverage, wherein Chile has offered concessions to India on 1,798 tariff lines with Margin of Preference (MoP) ranging from 30 per cent to 100 per cent and India has offered concessions to Chile on 1,031 tariff lines at eight-digit level with MoP ranging from 10 per cent to 100 per cent.
Chile is India's largest source of copper and the new rules have ensured that tariffs on the import of the raw material from Chile are low. Combined with a resurgence of commodity prices globally, copper ore imports have surged to $1.7 billion in 2017-18, almost double of the $911 million in the year before.
"The expanded deal allows for a lot more expansion in trade from both sides. India's exports are broad-based and shipments of pharmaceutical products and vehicles are expected to grow in Chile," Carolina Vasquez, commercial director of trade promotion body ProChile in India, said.
The India-Chile PTA has been one of the few trade deals expanded by India since the current government took charge.