India and South American nation Ecuador have inked the Protocol for Completion of the Joint Feasibility Study (JFS) between the two countries, in line with the government’s efforts to expand its trade presence in the region.
The Protocol was inked in New Delhi by Shyamal Misra, Joint Secretary, Ministry of Commerce and Industry and Héctor Cueva, ambassador of Ecuador in India. This has now opened the doors for both the countries to initiate trade negotiations for a Partial Scope Agreement (Preferential Trade Agreement).
Based on the analysis and exchange of information between the Ministry of Production, Foreign Trade, Investments and Fisheries of Ecuador –MPCEIP– and the Centre for Regional Trade –IIFT, the JFS has concluded that the proposed Trade Agreement is both feasible and mutually beneficial.
The two countries have great possibilities to contribute to the competitiveness of productive sectors in each Member country, and improving bilateral trade and enhancing the conditions for business cooperation.
According to ambassador of Ecuador to India, Héctor Cueva, “Once the PTA is in place the two trading partners would be in a position to reduce or eliminate customs duties on only a certain number of products traded between them.”
While India is helping Ecuador to set up a Centre for Excellency in Agriculture with the help of India, the two sides have been working on expanding the trade basket as the South American nation offers a privileged location in the region. According to the envoy, “The government of Ecuador offers favourable legislation on foreign investment and also preferential commercial access to different markets and the US dollar is its official currency”.
India represents a market of 1.3 billion inhabitants and its expected economic growth for the 2018-2023 period is 7.7% annually. Currently, Ecuador exports to the Indian market include wood, shrimp, cocoa, industrial machinery, skins and leather, among others. For its part, Ecuador imports from India: medicines, fertilizers, vehicles, propylene polymers, textiles.
Since both countries are celebrating their 50th anniversary of diplomatic relations, the two countries are seeking to strengthen and deepen their economic, commercial and cultural ties.
According to officials, the inking of the Partial Scope Agreement will contribute to improving and increase bilateral trade of goods and services and boost both economies.
Timeline for the JFS
In 2015, with the aim of further strengthening the existing trade relationship between India and Ecuador the protocol for the establishment of the India-Ecuador Joint Economic and Trade Committee (JETCO) was inked.
As has been reported earlier, the first meeting of the Joint Committee for Economic and Trade Cooperation Ecuador – India (JETCO) was held on May 17, 2017. And it then decided to explore, through a Joint Feasibility Study (JFS), the possibility of a Trade Agreement.
On May 22, 2018, the Terms of Reference for the Joint Study were approved and signed by both countries.
The Centre for Regional Trade, IIFT, from India, was assigned the task of conducting the study.
The Ecuadorian side assigned the task to the Coordination of Extra-Regional Trade Affairs Division of their Ministry of Foreign Trade and Investment for conducting the study.
The two sides completed the Joint Feasibility Study (JFS) and submitted it to their respective Governments on earlier this year in February.
After the signing of the Protocol, the negotiations with the aim to sign a Partial Trade Agreement (Preferential Trade Agreement) will start.