India, Chile working towards CEPA, top official says
India and Chile are negotiating a Comprehensive Economic Partnership Agreement (CEPA) to upgrade their existing Preferential Trade Agreement into a fuller economic pact.
Bilateral trade between the two countries crossed $5.6 billion in 2025, with both sides seeking to expand this base, particularly around critical minerals such as lithium and copper.
Officials highlighted Tamil Nadu as a priority region for Chilean collaboration, citing the state's manufacturing base in automobile engineering, port logistics, and renewable energy equipment.
The long service of the Honorary Consul facilitating India-Chile business ties in the state was recognised at a bilateral trade event.
India aims to conclude the CEPA negotiations within 2026; if finalised, it would be India's first such comprehensive trade agreement with a Latin American country.
From PTA to CEPA — India-Chile Trade Agreement Evolution
India and Chile's economic engagement began with a Preferential Trade Agreement (PTA) signed in March 2006 and entering into force in August 2007, covering a limited list of tariff lines. The scope of this PTA was expanded in 2016. The current negotiation seeks to convert this narrow, item-specific PTA into a full CEPA covering a much broader range of goods, services, and investment provisions — a template India has followed with several partners (e.g., India-Sri Lanka started as a 1998 FTA before deeper integration talks).
Key Details
- India-Chile PTA (2006/signed; in force 2007) — limited, product-specific tariff concessions, not comprehensive.
- 2016 expansion broadened the PTA's tariff-line coverage but retained the "preferential" (not comprehensive) structure.
- The CEPA under negotiation would be India's first comprehensive trade agreement with any Latin American nation, distinguishing it from India's existing PTAs with Chile, Mercosur (Brazil, Argentina, Uruguay, Paraguay — a separate PTA since 2009), and other regional blocs.
- Department of Commerce, Ministry of Commerce and Industry, leads negotiations on the Indian side.
The current round of talks represents this PTA-to-CEPA upgrade — a recurring UPSC-testable distinction between shallow preferential deals and comprehensive partnership agreements.
Critical Minerals Diplomacy and the National Critical Mineral Mission (2025)
India launched the National Critical Mineral Mission (NCMM) in January 2025 for the period 2024-25 to 2030-31, with a proposed outlay of ₹16,300 crore, aimed at securing supply chains for minerals essential to clean energy and electronics manufacturing (EVs, batteries, semiconductors). Chile holds the world's largest lithium reserves (estimated around 9.3 million tonnes) and is a major global copper producer, making it strategically significant for India's mineral security goals.
Key Details
- The Ministry of Mines' 2023 list identifies 30 critical minerals for India, including lithium, copper, cobalt, nickel, and rare earth elements (REEs).
- NCMM targets completion of 1,200 domestic exploration projects by 2030-31 and domestic production of at least 15 critical minerals.
- India is currently import-dependent for lithium, cobalt, nickel, and REEs — a strategic vulnerability given their role in EV batteries, solar panels, and defence electronics.
- KABIL (Khanij Bidesh India Ltd.), a joint venture of NALCO, HCL, and MECL, was set up in 2019 specifically to secure critical mineral assets overseas — the institutional vehicle through which deals like a Chile CEPA's minerals provisions would likely be operationalised.
The India-Chile CEPA talks are explicitly framed around securing lithium and copper access, linking this bilateral trade negotiation directly to India's domestic critical minerals security strategy under NCMM.
India's Trade Diversification Strategy — Latin America as a New Frontier
India's trade agreement network has historically concentrated on South/Southeast Asia, the Gulf, and more recently advanced economies (UAE, Australia, EFTA, UK, New Zealand). A CEPA with Chile would mark India's first comprehensive agreement in Latin America, a region where India's trade engagement has lagged relative to its economic size.
Key Details
- India's other Latin America-linked trade arrangement is the India-Mercosur PTA (in force since 2009), which remains a limited preferential deal, not a CEPA/FTA.
- India stayed outside RCEP (2020) and has pursued deeper bilateral deals instead — Chile CEPA fits this post-RCEP pattern of selective, deeper bilateral engagement.
- Chile is a founding OECD member in Latin America (since 2010) and has one of the region's most extensive existing FTA networks (with the US, EU, China, and others), making it a useful gateway for Indian goods into the wider Pacific Alliance/Latin American market.
Elevating the PTA to a CEPA would give India a more comprehensive trade foothold in Latin America for the first time, complementing its critical minerals objectives.
- India-Chile PTA signed: March 2006; entered into force: August 2007; scope expanded: 2016
- Bilateral trade volume (2025): over $5.6 billion
- National Critical Mineral Mission: launched January 2025, ₹16,300 crore outlay, 2024-25 to 2030-31
- Ministry of Mines' critical minerals list (2023): 30 minerals, including lithium and copper
- Chile's estimated lithium reserves: ~9.3 million tonnes (among the world's largest)
- Target: conclusion of India-Chile CEPA negotiations within 2026