Diplomatic discussions with Peru and Chile are set to resume in August
In the coming months, India will resume Free Trade Agreement (FTA) negotiations with Chile and Peru. The negotiations, scheduled for August 2025, mark the second round for India-Chile Comprehensive Economic Partnership Agreement (CEPA) and the eighth round for the India-Peru Free Trade Agreement (FTAA).
The upcoming negotiations are focused on critical minerals, digital services, investment, and micro, small, and medium enterprises (MSMEs), among other sectors. For India, securing strategic supply chains of critical minerals is a key objective, as these minerals are essential for emerging technologies, advanced manufacturing, clean energy transition, and electronics sectors.
India and Chile have already developed a bilateral mechanism on critical minerals, and Chile is being considered as a supplier of critical minerals by India. Similarly, the negotiations with Peru aim to expand trade ties and diversify India's supply sources, reducing dependencies.
The India-Chile CEPA aims to upgrade their existing Preferential Trade Agreement (PTA) to a comprehensive economic partnership covering a broader and deeper economic cooperation framework. The negotiations seek to strengthen sectors such as trade in services, investment promotion, digital services, women's economic empowerment, sustainable development, and intellectual property rights within the CEPA framework.
For India-Peru FTA talks, while the detailed agenda is less reported, the negotiations are similarly focused on expanding trade ties with an emphasis on critical minerals. The negotiations will address remaining issues and build on prior rounds, aiming to conclude these agreements by 2026.
Enhanced cooperation in critical minerals trade is expected to secure access to rare earth elements and other essential minerals critical for India's clean energy and technology sectors. Agreements on investment facilitation, custom and trade procedures, technical barriers to trade, and dispute resolution setups are also anticipated to smoothen bilateral trade and cooperation.
Beyond goods, the agreements aim to broaden trade to include services, investment flows, and MSME participation. The negotiations also focus on sustainable development, environmental and social standards in trade, and trade facilitation, including customs procedures, dispute settlement, and technical standards.
In the last two decades, trade between India and Peru has increased significantly, from $66 million in 2003 to around $3.68 billion in 2023. India's exports to Peru stood at $1.0 billion last fiscal year, while imports were $4.9 billion. Electronics have emerged as a significant sector in India's exports to Peru, although the exact figures are not provided in the text.
India's exports to Chile during the same period were $1.1 billion, with key exports being pharma, auto, and machinery. Chile's imports from India were $2.6 billion in 2024-25, with key products being fruits and nuts, and minerals and ores accounting for $1.5 billion of the total. Of the total imports from Peru, $4.5 billion were accounted for by pearls, precious and semi-precious stones and other related items.
The negotiations with Chile and Peru, specifically regarding the CEPA and FTAA, respectively, discussed the chapters of Custom Procedures and Trade Facilitation, Initial Provisions and General Definitions, Legal and Institutional Provisions, Final Provisions, Trade Remedies, General and Security Exceptions, Dispute Settlement and Cooperation.
In summary, critical minerals form a core pillar of the strategic objectives for these FTAs, reflecting India's commitment to diversify its mineral supply chain, support clean energy ambitions, and deepen economic ties with South American partners Chile and Peru. The agreements intend to foster a comprehensive framework covering goods, services, investments, and sustainability in trade relations.
- The upcoming negotiations between India and Chile, as well as India and Peru, are centered on sectors such as investment, digital services, and critical minerals, with India aiming to secure strategic supply chains of these critical minerals.
- Agreements on investment facilitation, custom and trade procedures, technical barriers to trade, and dispute resolution setups are anticipated to smooth bilateral trade and cooperation in both the India-Chile CEPA and India-Peru FTAA.
- Beyond goods, the agreements aim to broaden trade to include services, investment flows, and micro, small, and medium enterprises (MSMEs) participation, focusing on sustainable development, environmental and social standards in trade, and trade facilitation.
- In the context of decentralized finance (Defi) and digital assets, the implications of these FTAs for the exchange and trading of cryptocurrencies and digital assets could potentially expand as these agreements aim to foster a comprehensive framework covering various aspects of trade and finance.
