India and South American nation Chile have started negotiations for further expansion of a trade agreement with a view to boost two-way commerce and economic ties, an official said.

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Both the countries signed a preferential trade agreement (PTA) on March 8, 2006 and it came into force from August 2007.

In 2016, India and Chile expanded the scope of the agreement by including more products.

The two countries have again initiated talks for second expansion of the trade agreement, the official said.

The first round of negotiations with Chile on the second expansion of India-Chile PTA was recently concluded.

"Both sides have decided to hold the next round of the talks in Santiago in Chile during March or in the first half of April," the official added.

In a PTA, two trading partners significantly reduce or eliminate import duties on certain goods traded between them.

The official said India's export basket with Chile is diversified and keeping in view the wide variety of tariff lines (or products) offered by Chile, the expanded PTA would benefit both the countries.

Among the Latin american countries, Chile is one of the largest trading partners of India.

India's bilateral trade with Chile has marginally declined to USD 2.22 billion in 2018-19 from USD 2.85 billion in 2017-18.

India's exports to Chile include transport equipment, pharmaceuticals, yarn of polyester fibres, tyres and tubes, manufacture of metals, articles of apparel, organic/inorganic and agro chemicals, textiles, readymade garments, plastic goods, leather products, engineering goods, imitation jewellery, sports goods and handicraft.

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Major items of import from Chile are copper ore and concentrates, iodine, copper anodes, copper cathodes, molybdenum ores and concentrates, lithium carbonates, metal scrap, chemicals, pulp and waste paper, fruits and nuts excluding cashews, fertilizers and machinery.