NEW DELHI, Jan 20: India and Chile on Thursday signed three agreements including one to galvanise trade, which at $400 million was far below potential, officials of both countries said.

The Framework Agreement for Economic Cooperation will help India and Chile to transcend "the barriers of distance, climate, language and culture," India's Trade Minister Kamal Nath said.

The deal is set to be followed by a Preferential Trade Agreement later this year and culminate in a Comprehensive Economic Cooperation Agreement, an Indian foreign ministry statement said.

The agreements - including two in the agriculture sector - were signed after talks between Indian Prime Minister Manmohan Singh and Chilean President Ricardo Lagos. Lagos, the first Chilean president to visit India, invited Indian businessmen to use his country "as a springboard for entering Latin American markets."

"Setting up base in Chile will open markets of Europe, Canada, the Americas and Korea for Indian companies who will be able to export their products to these markets at zero duty," he told an Indian business meeting.

Lagos also urged India to increase its trade with his country by diversifying the export basket - which at present contains automobiles, pharmaceuticals, information technology, textiles, carpets and leather products.

"Chile's exports are $53 billion while our imports are $24 billion. Our tariffs are really low, I do not see why Indian exports to Chile should be just $80 million," he said.

Onkar S. Kanwar, president of the Federation of Indian Chambers of Commerce and Industry said, "Chile offers huge potential for speciality teas from India. Defence and science and technology are some other areas of mutual cooperation."

A Press Trust of India report said Chile had shown interest in buying advanced light helicopters and other defence hardware from India. The Chilean defence minister was expected to visit India in April this year, it said. The foreign ministry said India and Chile had "agreed on the importance of a sound, transparent, equitable and rule-based multilateral trading system. -AFP