Enhancing India CARIFORUM Economic Relations and Prospects for Cooperation

Expanding Trade Agreements In the Latin American and Caribbean (LAC) region, India presently has Preferential Trade Agreements (PTA) with Chile and MERCOSUR and negotiations over a Free Trade Agreement (FTA) are ongoing between India and Peru. Ecuador has also shown interest in negotiating a PTA with India, and Colombia is also interested in collaborating with India in industries like food processing and agriculture. However, India does not have a PTA or FTA with any CARIFORUM country. India has signed a trade agreement with Trinidad & Tobago (signed in 1997), which accords most favored nation status to each other. Based on its economically influential role in the region and supported by regional and bilateral preferential trade agreements, Trinidad & Tobago provides good opportunities to exporters from India to access the Caribbean region and beyond. Thus, going forward, India and CARIFORUM countries could, perhaps, focus on negotiating comprehensive free trade agreements with one another in the future, or at least partial preferential agreements, which could later be upgraded. The CARIFORUM countries have numerous trade agreements with major trade blocs of the world. For the Indian corporates the CARIFORUM region could, therefore, also act as a gateway to the world, besides the potential existing in the CARIFORUM region itself. The Dominican Republic-Central America FTA (CAFTA-DR) is the first free trade agreement between the United States and a group of smaller developing economies like Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, as well as the Dominican Republic. The CAFTA-DR promotes stronger trade and investment ties, prosperity, and stability throughout the region. The implementation of DR- CAFTA pact presents opportunities for Indian companies which could setup operations in the Dominican Republic for the US market . Transportation and Logistics Costs One of the major impediments to trade between India and the CARIFORUM countries is trade logistics and transportation costs. Efforts should be made to reduce transaction and transport costs, streamline trade logistics, promote communication with trading partners and enhance the international competitiveness and innovation capabilities of countries in both regions. Shipping companies could be incentivized to rationalize and reduce transport costs between India and CARIFORUM countries.

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Enhancing India-CARIFORUM Economic Relations and Prospects for Cooperation

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