NEW DELHI: India will start negotiations for a free trade agreement with mineral-rich Chile from May 26 in New Delhi, the commerce ministry said on Friday, a day after the two countries signed the terms of reference (ToR) for a comprehensive economic partnership agreement (CEPA).
The two countries reiterated their shared vision for strengthening bilateral relations and look forward to fruitful discussion during the first round of talks during May 26-30, in New Delhi, a commerce ministry statement said on Friday.
The ToR was signed by Ambassador of Chile in India Juan Angulo and commerce ministry’s joint secretary Vimal Anand, who is also the chief negotiator for India-Chile CEPA negotiations representing the Indian side.
Bilateral merchandise trade between India and Chile was only about $2.7 billion in 2023-24 but the two countries expect a huge jump on account of Chile’s deposits of copper, lithium, and other critical minerals needed by India for industrial growth and sustainable energy transition.
A government official said a free trade deal between the two countries will help India meet the demand for critical minerals. These minerals are of strategic importance for sectors such as electric mobility, renewable energy, and electronics manufacturing, he said.
Indian firms are also looking at joint ventures and long-term supply agreements to establish a strong mineral supply chain. Chile is a global leader in copper and lithium production, he added.
The proposed CEPA aims to build upon the existing Preferential Trade Agreement (PTA) between the two nations and seeks to encompass a broader range of sectors, including digital services, investment promotion and cooperation, micro small and medium enterprises (MSME), and critical minerals, thereby enhancing economic integration and cooperation, the commerce ministry said.
India and Chile signed a framework agreement on economic cooperation in January 2005, followed by a PTA in March 2006. An expanded PTA was signed in September 2016 and became effective from May 16, 2017.
In April, 2019, the two countries agreed to pursue a further expansion of the PTA with three rounds of negotiations during 2019-2021, it said.
To deepen their economic engagement, both sides expressed their intention to negotiate a CEPA to unlock the full potential of their trade and commercial relationship, boosting employment, facilitating investment promotion, and cooperation and exports, as suggested by the joint study group (JSG) established under the framework agreement. The JSG report was finalised and signed on April 30, 2024, the ministry said.
This shared vision was reaffirmed during the recent state visit of Chilean President Gabriel Boric Font to India on April 1-5, 2025 on an invitation from Prime Minister Narendra Modi.
Chile is India’s 5th largest trading partner in the Latin America and the Caribbean (LAC) region.
India’s exports to Chile are diversified and constitute motor vehicles, drug formulations, chemicals, products of iron and steel, man-made yarn, fabrics, cotton fabrics, garments, accessories, auto components, electric machinery, leather goods, rubber products, bulk drugs, drug intermediates, footwear of leather, iron and steel, aluminium & its product, ceramics and allied products.