Examine the statements below and select the most appropriate option.
Assertion (A): India and Chile’s signing of the CEPA Terms of Reference in May 2025 signified a strategic move beyond the underperforming Preferential Trade Agreement (PTA).
Reason (R): The April 2024 Joint Study Group recommended a broader CEPA to boost cooperation in digital services, critical minerals, and MSMEs.
Show answer & explanation
Correct answer: A
Explanation
Correct Answer
Both A and R are true, and R is the correct explanation of A
Explanation
Statement (A) is correct because the signing of the CEPA Terms of Reference between India and Chile in May 2025 marked a strategic shift from the earlier Preferential Trade Agreement (PTA), which had shown limited effectiveness, towards a broader and more comprehensive economic partnership framework.
Statement (R) is also correct because the Joint Study Group (JSG) in April 2024 recommended expanding cooperation under a CEPA framework, especially in areas like digital services, critical minerals, and MSMEs.
R correctly explains A because the recommendations of the Joint Study Group formed the basis for moving beyond the PTA and initiating the CEPA process between India and Chile.
Key Points
• India–Chile CEPA represents a deeper and broader economic partnership than PTA.
• The JSG highlighted sectors such as digital services, critical minerals, and MSMEs.
• CEPA aims to strengthen trade and investment cooperation.
• It elevates bilateral economic relations to a strategic level.
Additional Facts
• CEPA (Comprehensive Economic Partnership Agreement) is more extensive than PTA.
• India is actively expanding CEPA/FTA agreements with multiple countries.
• Chile is an important trade partner for India in Latin America.
Important Questions
Q: What does CEPA stand for?
Ans: Comprehensive Economic Partnership Agreement
Q: How is CEPA different from PTA?
Ans: CEPA provides broader and deeper economic cooperation compared to the limited concessions under PTA.