India and Chile have officially launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA), a move that is expected to enhance the economic and trade relations between the two nations. This decision aims to boost trade, investment, and bilateral cooperation across multiple sectors such as defense, technology, minerals, and agriculture. The agreement is set to play a key role in strengthening ties and creating new avenues for growth in the global economic landscape.
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A Historic Step in Bilateral Relations
The announcement comes after several years of collaboration between India and Chile, particularly in the areas of trade and commerce. The two countries have already been cooperating under a Preferential Trade Agreement (PTA), signed in 2007, which was further expanded in 2017. However, with the global economic environment evolving rapidly, both countries now seek a more comprehensive framework that addresses the challenges of the modern economic world, such as supply chain resilience, critical mineral resources, and technological advancements.
Key Areas of Focus for the CEPA
- Minerals and Natural Resources: Chile is one of the world’s largest producers of copper and lithium, both essential for India’s growing electric vehicle and renewable energy industries. The CEPA will focus on improving access to these critical resources, which are key for India’s energy transition plans. Both countries are expected to strengthen cooperation in the mineral exploration and mining sectors.
- Defense and Technology: Another crucial aspect of the trade talks will be defense cooperation. Both nations are exploring opportunities for joint defense manufacturing, along with strengthening ties in areas like cyber security, digital infrastructure, and technology. This collaboration could also help India bolster its defense supply chain resilience, while Chile benefits from India’s technology expertise.
- Agriculture and Food Security: Agriculture will also be a prominent focus, as the two countries plan to exchange knowledge and technology to increase agricultural productivity and sustainability. The partnership will focus on enhancing food security and implementing innovative solutions for better resource management in both nations.
- Trade and Investment: The CEPA will address non-tariff and tariff barriers to trade between India and Chile, making it easier for both countries to expand their trade volumes. By reducing trade barriers, India and Chile hope to create a more conducive environment for mutual growth and investment opportunities.
Recent Developments
The ongoing collaboration between India and Chile is already visible in the area of critical minerals. India has made significant strides in securing access to lithium, an essential mineral for electric vehicle batteries, through state-owned enterprises like Khanij Bidesh India Ltd (KABIL).
In March 2025, India’s KABIL began talks with SQM, a leading Chilean mining company, to acquire stakes in lithium projects located in Western Australia. This strategic move aligns with India’s long-term vision to ensure access to critical minerals required for its energy transition.
The Way Forward
The launch of CEPA negotiations signifies a forward-thinking approach by both India and Chile to establish a long-term, strategic partnership. The agreement is expected to go beyond simple trade agreements and will address a wide range of challenges in areas like technology, infrastructure, defense, and natural resources.
Both countries are optimistic that the agreement will provide opportunities for further economic integration and diversification.
Prime Minister of India, Narendra Modi, and President of Chile, Gabriel Boric, both emphasized their commitment to the agreement, highlighting how it will not only improve bilateral trade but also enhance global cooperation in facing emerging global challenges such as climate change, technological advancements, and energy transitions.
The Economic Impact of the Agreement
The Comprehensive Economic Partnership Agreement (CEPA) is expected to unlock a host of benefits for both countries, including but not limited to:
- Increased Trade: By removing barriers to trade, both nations anticipate an increase in bilateral trade across various sectors.
- Attractive Investment Environment: The agreement will make India and Chile more attractive to global investors by providing a stable and transparent trading environment.
- Strategic Benefits: With an emphasis on technology transfer, defense cooperation, and resource sharing, the CEPA will also strengthen the strategic relationship between India and Chile.
- Job Creation: As trade and investment grow, the CEPA could lead to job creation in various sectors like manufacturing, agriculture, and services.
Final Thoughts
The launch of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between India and Chile is a historic and crucial step in strengthening bilateral ties. As both countries embark on this path, they are poised to unlock new avenues of growth and cooperation across critical sectors like minerals, defense, technology, and agriculture. By reducing trade barriers, promoting joint ventures, and focusing on sustainable economic practices, the agreement promises to enhance both nations’ positions on the global economic stage.
The negotiations mark the beginning of a new era for India-Chile relations, one that is set to foster mutual growth, innovation, and prosperity in the years to come.
By – Nikita
