India’s Chile Bet Goes Beyond Trade

India is preparing for a fresh push to advance negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with Chile, with Commerce Secretary Rajesh Agrawal expected to travel to Santiago later this month, according to an official familiar with the matter.

The visit comes after four rounds of negotiations between the two countries, with the latest held in New Delhi in December 2025. Formal negotiations have not resumed since then, following a change of government in Chile. José Antonio Kast, who won Chile’s 2025 presidential election, took office on March 11, 2026. However, officials from both sides have continued discussions despite the pause in formal talks.

Agrawal’s visit is expected to review the progress made so far and identify the issues that remain unresolved. India’s position is that the agreement must provide sufficient gains for Indian businesses. New Delhi is not under pressure to conclude a pact that does not meet those expectations.

India and Chile have had a Preferential Trade Agreement since 2007, which was later expanded to cover a much larger range of products. The proposed CEPA would be considerably broader. It is expected to cover trade in goods and services, investment, digital trade, movement of professionals, cooperation involving smaller businesses, and critical and strategic minerals.

The Terms of Reference for the negotiations were finalised in April 2025, paving the way for the first round of talks in May. Four rounds followed, with negotiators making progress across several areas. The more difficult part of the negotiations is now likely to involve issues where the commercial interests of the two sides differ.

One of the most important areas is critical minerals. Chile is a major producer of lithium and copper, both of which are important to industries such as electric vehicles, batteries, renewable energy and electrical equipment. India’s interest is not limited to buying these minerals. It also wants greater certainty for companies planning investments and production around them.

The proposed CEPA includes a chapter on critical and strategic minerals, making the issue an important part of the next stage of talks. Recent interest by Indian companies in Chilean lithium projects has further highlighted the growing importance of this part of the relationship.

Chilean Ambassador to India Juan Angulo has argued that cooperation should go beyond the export of raw materials.

“It is not enough simply to sell lithium or copper. The future lies in participating together across the value chain, from extraction to battery manufacturing and other advanced technologies,” he said. That would give Indian companies scope to participate in processing and manufacturing in Chile, rather than limiting the relationship to the purchase of commodities.

Angulo has also stressed that access to resources alone would not be enough to attract long-term investment. “Resources alone are not sufficient. Investors also need legal certainty, infrastructure and institutional stability. Chile offers that combination.”

The broader trade relationship is already expanding. Bilateral trade rose to around $5.38 billion in 2025 from $3.84 billion in 2024. Indian exports increased by about 14 per cent to $1.41 billion, while imports from Chile jumped 53 per cent to approximately $3.97 billion. Higher gold imports contributed significantly to the increase in Indian imports.

The two countries have markedly different trade baskets. India’s exports to Chile include automobiles, pharmaceuticals, electrical machinery, textiles, footwear, chemicals, agricultural and food products, and iron and steel goods.

Chile’s exports to India are more heavily concentrated in minerals and ores, including copper concentrate, molybdenum, iodine and gold. Other exports include inorganic chemicals and agricultural products.

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That difference has contributed to a widening trade deficit for India, which is likely to be an important consideration as the negotiations move forward. The challenge for negotiators will be to expand market access for Indian exporters while securing the supplies and investment opportunities that India sees as important.

Services are another area where India sees room for growth. Technology, engineering and other professional services could benefit if the agreement establishes clearer rules covering investment and the movement of professionals.

The proposed CEPA could also widen the relationship beyond conventional trade in goods. Chile has developed a significant startup ecosystem, while India has a large technology and entrepreneurship market. Chile’s network of trade agreements also gives it a position from which companies can reach other Latin American markets.

For India, the negotiations therefore involve several separate interests: improving access for its exporters, expanding opportunities for services companies, attracting investment and securing more predictable access to critical minerals.

For Chile, a CEPA with India would provide a framework for deeper economic engagement with one of the world’s largest economies. The next stage of negotiations will determine whether the two sides can reconcile those interests and resolve the commercially sensitive issues that remain.