India and Chile Aim to Seal a Broader Trade Pact by Year-End
India and Chile have given themselves until the end of 2026 to finish a Comprehensive Economic Partnership Agreement, after Commerce Secretary Rajesh Agrawal met Chile’s Vice-Minister of International Economic Relations, Paula Estévez, in Santiago. The two sides already trade under a limited preferential deal. What they are now trying to write is a wider pact that covers goods, investment, services and, above all, rules for copper, lithium and other minerals that India needs for batteries, solar manufacturing and electronics. Officials in both capitals say most of the legal text is already on the table. The remaining argument is over how much market access Chile gets in India and how firmly India can lock in mineral supply.
A short meeting with a long deadline
Agrawal’s stop in Santiago was part of a wider Latin American tour that also takes him to Argentina and Brazil. In Chile the message from New Delhi was that bilateral trade is growing and that India still wants the talks closed this year, with results that businesses on both sides can use. Estévez, speaking after the meeting, treated the visit as a sign that India is serious and said Chile sees the Indian market as a way to spread its exports beyond the usual destinations. Chilean officials added that most chapters are closed and that work now sits on market access, critical minerals and a handful of other items. Both governments have repeated the same calendar: finish before December.
How the relationship grew from a narrow tariff list
The current Preferential Trade Agreement took effect in 2007 and first covered 474 tariff lines. In 2016 the list was widened to 2,829 lines, and that expanded version entered force in 2017. Terms of reference to turn the PTA into a full CEPA were agreed in the spring of 2025. Four formal rounds followed, the last of them in New Delhi in December 2025, and negotiators have since worked from a third draft.
Talks then paused after Chile’s December 2025 election. José Antonio Kast took office as president on 11 March 2026, and the new government reviewed the inherited text before deciding whether to go on. In May, Foreign Minister Francisco Pérez Mackenna and Estévez travelled to New Delhi and met Commerce and Industry Minister Piyush Goyal as well as Agrawal. Santiago then said it wanted to resume. That sequence explains why a deal that looked close last winter is only now being pushed again toward a year-end close.
The two remaining fights: farms and mines
Chile wants lower Indian tariffs on products that still face steep duties. Santiago has asked for openings in gold, salmon, wine, apples, walnuts, avocados and other fruit. Average Indian tariffs facing Chilean goods have been put at about 16.2 per cent, and they can rise toward 36.7 per cent on agro-industrial items. Chile has offered cuts on more than 90 per cent of its own tariff lines. India has discussed cuts on around 70 per cent and has been told that Chile could accept even 60 per cent coverage if its priority products are inside the deal. A mid-year briefing put the share of the text already agreed at about 80 per cent. The leftover dispute is therefore not about whether there will be a pact, but about which sensitive Indian lines stay protected.
India’s counterpart demand is a dedicated chapter on critical and strategic minerals, something New Delhi has also pursued with Peru. Chile sits in South America’s Lithium Triangle and is the world’s leading copper producer, with a large share of global copper output and lithium reserves. India wants rules against sudden export curbs and more predictable supply for electric-vehicle batteries and renewable manufacturing. Chile wants more processing and value added at home rather than shipping raw ore.
Indian companies are already looking at projects on the ground. Coal India has approved a Chilean holding company. Adani’s Kutch Copper signed a memorandum with state miner Codelco. Hindustan Copper has discussed a joint venture. A Kuska–Coal India consortium has sought a lithium contract at the Salar de Ollagüe. In the last full fiscal year Chile was already a major source of India’s lithium carbonate and lithium hydroxide imports. The CEPA is meant to turn that commercial interest into a more stable legal frame.
Trade has risen faster than the paperwork
Chile is India’s fifth-largest trading partner in Latin America and the Caribbean. Calendar-year goods trade rose from 3.84 billion dollars in 2024 to 5.38 billion dollars in 2025. Indian exports grew 14 per cent to 1.41 billion dollars. Imports rose 53 per cent to 3.97 billion dollars, lifted by gold as well as copper concentrate, molybdenum, iodine and fruit. Indian shipments are led by vehicles, pharmaceuticals, electrical machinery, textiles, chemicals and steel. Indian firms’ investment in Chile is estimated around 620 million dollars; Chilean investment in India around 118 million dollars. Latin America as a whole still takes only a small slice of India’s exports, under 3.5 per cent in recent figures. That is why New Delhi treats the region as both a minerals source and a diversification market, not as a finished story.
The rest of the South American swing
After Santiago, Agrawal is due in Argentina for a Joint Trade Committee that last met in October 2020, and then in Brazil. Those meetings are expected to touch expansion of the India–Mercosur preferential arrangement, in force since 2009 and still limited to about 450 tariff lines. Mercosur includes Brazil, Argentina, Uruguay and Paraguay. India is running a parallel process with Peru that also features a critical-minerals chapter. The Chile CEPA is therefore one piece of a wider attempt to thicken ties across the southern cone rather than a standalone experiment.
The MGMM Outlook
India and Chile are moving toward a broader economic partnership, with both sides aiming to conclude a Comprehensive Economic Partnership Agreement by the end of 2026. The proposed CEPA would expand the existing preferential trade arrangement to cover goods, services, investment and critical minerals, particularly copper and lithium that are increasingly important for India’s electric-vehicle, renewable-energy and electronics sectors. With most of the legal framework already negotiated, the remaining discussions are focused largely on market access and sensitive agricultural products on the Chilean side, alongside stronger and more predictable access to strategic minerals for India. The sharp rise in bilateral trade—from $3.84 billion in 2024 to $5.38 billion in 2025—shows that economic ties are already gaining momentum, while growing interest from Indian companies in Chilean mining projects adds further significance to the negotiations.
The proposed agreement also fits into India’s wider effort to deepen economic engagement with Latin America and diversify both export markets and sources of critical raw materials. Chile, as a major global producer of copper and an important lithium economy, can play a valuable role in supporting India’s long-term manufacturing and clean-energy ambitions, while Indian pharmaceuticals, automobiles, engineering goods, textiles and chemicals offer Chile greater access to a large and expanding market. With parallel trade discussions underway with other countries and regional groupings in South America, a successful India–Chile CEPA could become an important foundation for stronger India–Latin America economic relations. The focus now is on completing the remaining negotiations in a balanced manner that protects legitimate domestic interests while creating greater opportunities for trade, investment and reliable mineral partnerships.
(Sources: The Financial Express, Economic Times)
Comments