India eyes critical minerals, bigger markets in South America trade push
India's Commerce Secretary is undertaking a visit to Argentina and Brazil to chair joint trade committee meetings as part of a broader push to strengthen trade ties with South American economies
Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with Chile are in an advanced stage, building on the existing bilateral Preferential Trade Agreement (PTA)
Talks are also underway to expand the scope of the existing India-Mercosur Preferential Trade Agreement
Critical minerals — particularly lithium and copper, in which Chile and other South American economies hold large reserves — form a central plank of the engagement
The visit is framed as part of India's broader strategy to diversify export markets and reduce trade concentration in a small set of partner geographies
India-Chile Trade Framework — From PTA to CEPA
India and Chile have had a Preferential Trade Agreement in force since 2007, later broadened in scope in 2016. The two countries signed the Terms of Reference for negotiating a more comprehensive successor — a Comprehensive Economic Partnership Agreement (CEPA) — in May 2025, aiming to expand coverage beyond tariff lines into areas such as critical minerals, digital services, investment promotion and MSME cooperation.
Key Details
- India-Chile PTA: signed March 2006, entered into force August 2007; scope broadened in 2016
- Terms of Reference for India-Chile CEPA signed 8 May 2025
- CEPA negotiating rounds have followed through 2025 (multiple rounds completed by end-2025)
- CEPA is intended to include a dedicated critical minerals component, distinguishing it from a standard tariff-focused PTA
- A PTA offers tariff concessions on a limited, negotiated list of products, while a CEPA/CECA/FTA covers a much wider range of goods, services, investment and regulatory cooperation — a key prelims distinction
The "advanced stage" talks referenced in the current visit are the ongoing CEPA negotiating rounds that will eventually supersede the narrower 2007 PTA with Chile.
India-Mercosur Preferential Trade Agreement
The India-Mercosur PTA is a limited-coverage trade agreement, distinct from a full free trade agreement, that has governed India's trade with the Mercosur bloc since 2009. Both sides have periodically discussed expanding its narrow product coverage.
Key Details
- India-Mercosur PTA: negotiations concluded 2004, signed 2004, entered into force June 2009
- Parties: India and the Mercosur bloc — Brazil, Argentina, Uruguay and Paraguay (Venezuela, a Mercosur member, is not a party to this PTA)
- Mercosur (Mercado Comun del Sur/Southern Common Market) itself was established in 1991 by Brazil, Argentina, Paraguay and Uruguay
- The PTA covers only around 450 tariff lines, making it one of India's narrowest preferential arrangements — talks to expand this scope have recurred since the mid-2020s
- Governed through a Joint Trade Committee mechanism, distinct from the annual India-Brazil Trade Monitoring Mechanism
The joint trade committee meetings being chaired during this visit are the institutional mechanism through which India and Mercosur members are negotiating the scope of an expanded PTA.
Critical Minerals and India's Import Diversification Strategy
Critical minerals are minerals essential for high-technology, defence and clean-energy applications that face high supply-chain concentration risk. India has designated a formal list of 30 critical minerals and launched a National Critical Mineral Mission to secure supply, including through overseas acquisition — directly relevant to why South American reserves (lithium, copper) feature in this trade push.
Key Details
- India's critical minerals list: 30 minerals identified by a Ministry of Mines committee (2022); 24 of these are placed in Part D of Schedule I of the Mines and Minerals (Development and Regulation) Act, 1957, reserved for central government auction
- National Critical Mineral Mission: approved January 2025, outlay of about Rs 34,300 crore over FY2024-25 to FY2030-31
- Khanij Bidesh India Ltd (KABIL) — a joint-venture PSU under the Ministry of Mines — has acquired lithium exploration rights in Argentina (Catamarca province)
- Chile holds roughly 61% of global lithium reserves (by some estimates) and is among the world's top lithium and copper producers; Brazil and Argentina complete the South American "Lithium Triangle" along with Chile
The critical-minerals dimension of this trade push is an extension of KABIL's overseas acquisition mandate and the National Critical Mineral Mission's goal of diversifying import sources away from concentrated suppliers.
- India-Chile PTA in force since: August 2007; CEPA Terms of Reference signed: 8 May 2025
- India-Mercosur PTA in force since: June 2009; covers approximately 450 tariff lines
- Mercosur founding members (1991): Brazil, Argentina, Paraguay, Uruguay
- India's critical minerals list: 30 minerals (2022); National Critical Mineral Mission outlay: ~Rs 34,300 crore (2024-25 to 2030-31)
- Chile's global lithium reserve share: roughly 60%+ by some estimates; among world's top-2 lithium producers and largest copper producer
- KABIL has secured lithium exploration blocks in Argentina's Catamarca province