Fresh fruit basket from Chile set to grow bigger in size

India has announced higher tariff son US apples, while kiwis, avocados from Chile enjoy lower tariffs

Fresh produce from faraway Chile may just take over the Indian supermarkets and mandis soon. Spurred by a burgeoning demand for high- quality foreign fruits in India, coupled with lower import duties, allowed under a bilateral trade deal, fruit exporters from the country 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 — India's largest source of the fruit. "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, 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 over 30 per cent in the past two years. Of this, apples make up the largest share at $24 million, followed by walnuts and kiwis. With produce from the US under threat of high tariffs, at least a few major fruit importers have inquired about prices of Chilean apples and other fruits, a trader based in Santiago said.

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.

"Current fruit exports to India are pegged at 30,000 tonnes per year, with apples making up 79 per cent of shipments. 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.

Low tariffs under bilateral pact helps fruits but not Indian exports

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 due to the country having 50 per cent tariff advantage on Kiwis as compared to other countries under an existing bilateral trade deal.

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 high 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.

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 the year before.

The expanded PTA has a wider coverage, wherein Chile has offered to reduce tariffs on 1,798 Indian products, while India has done the same for 1,031 Chilean products.

"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.