India committed to conclude trade pact with Chile this year: Commerce Minister
The government reaffirmed its intent to conclude negotiations on a Comprehensive Economic Partnership Agreement (CEPA) with Chile within the year
The Commerce Secretary undertook an on-site visit to Chile to review the state of negotiations with Chile's trade officials
Negotiators indicated that the two sides have concluded roughly 80% of the agreement, with critical minerals and market access among the remaining sticking points
The proposed CEPA builds on the existing India-Chile Preferential Trade Agreement (PTA), in force since 2007, by widening its scope
Trade Agreement Typology: PTA vs FTA vs CEPA vs CECA
India's trade agreements form a graded hierarchy based on scope and depth of coverage. A Preferential Trade Agreement (PTA) offers selective, limited tariff concessions on a specified list of goods; a Free Trade Agreement (FTA) eliminates or substantially reduces tariffs across most goods trade; a Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) goes further, covering services, investment, intellectual property, government procurement, and regulatory cooperation alongside goods.
Key Details
- CEPA/CECA are considered the most ambitious category, incorporating trade facilitation and behind-the-border regulatory issues, not just tariff lines
- India's existing CEPAs include the India-UAE CEPA (2022) and India-Australia Economic Cooperation and Trade Agreement (ECTA, 2022) — the latter is a stepping stone toward a fuller India-Australia CECA under negotiation
- Ministry of Commerce and Industry's Department of Commerce negotiates and administers all Indian trade agreements
- The India-Chile PTA (signed March 2006, in force from August 2007 in Chile and September 2007 in India) is a limited-list agreement, not a comprehensive one
Upgrading the India-Chile relationship from a PTA to a CEPA reflects India's broader trade strategy of deepening existing preferential arrangements into comprehensive agreements, similar to the earlier ECTA-to-CECA upgrade pursued with Australia.
India-Chile Preferential Trade Agreement (2006) — the Existing Baseline
The India-Chile PTA is the current legal foundation of bilateral trade preferences, offering tariff concessions on a limited list of products rather than economy-wide liberalisation.
Key Details
- Signed in March 2006; entered into force in August 2007 (Chile) and September 2007 (India)
- Chile's offer covered tariff concessions of 10-50% on 178 tariff lines from India; India's offer covered a similar range of preferences on 296 tariff lines from Chile
- Key Indian exports benefiting: textiles, chemicals, pharmaceuticals, and engineering/agricultural machinery; key Chilean exports benefiting: copper, fish meal, iodine, and salmon
- The PTA has since been expanded in phases to add more tariff lines, but remains narrower than a full FTA/CEPA in coverage
The CEPA under negotiation is explicitly designed to widen this 2006 PTA's limited product list into comprehensive coverage of goods, services, investment, MSMEs, and critical minerals cooperation.
Critical Minerals Cooperation and India's Overseas Mineral Strategy
Critical minerals — especially lithium, needed for EV batteries and energy storage — are a key sticking point in the CEPA talks because Chile holds among the world's largest economically viable lithium reserves and is a leading global producer.
Key Details
- Chile is part of South America's "Lithium Triangle" (with Argentina and Bolivia), which together hold over half of the world's identified lithium resources; Chile has converted a large share of its resources into commercially producible reserves and ranks among the top global lithium producers
- India's overseas critical mineral acquisition arm, Khanij Bidesh India Limited (KABIL), was incorporated in August 2019 as a joint venture of NALCO, Hindustan Copper Ltd, and Mineral Exploration and Consultancy Ltd, under the Ministry of Mines
- KABIL has been exploring lithium and cobalt asset opportunities in Argentina, Australia, and Chile as part of India's National Critical Mineral Mission
- Critical minerals are also central to India's broader supply-chain diversification strategy, alongside initiatives like the India-US critical minerals partnership
The unresolved "critical minerals" chapter in the India-Chile CEPA talks is directly linked to India's push, through KABIL and the National Critical Mineral Mission, to secure long-term lithium supply for its clean-energy and EV manufacturing ambitions.
- India-Chile PTA: signed March 2006; in force August 2007 (Chile) / September 2007 (India)
- CEPA negotiations: approximately 80% concluded as of the latest round
- Remaining issues: critical minerals and market access
- KABIL: incorporated 8 August 2019, under the Ministry of Mines
- Chile's share (with Argentina and Bolivia) of world lithium resources: over 50%, per the "Lithium Triangle" framing
- Comparable Indian CEPAs: India-UAE CEPA (2022), India-Australia ECTA (2022)