India Eyes Chile Trade Pact for Critical Minerals

India’s Commerce Secretary Rajesh Agrawal embarked on a visit to South America from July 24 to July 28. The trip aims to resolve outstanding issues in a proposed trade agreement with Chile and secure vital mineral supply chains.

The delegation’s primary focus involves the Comprehensive Economic Partnership Agreement (CEPA) with Chile. This pact is crucial for India’s electric vehicle battery manufacturing and renewable energy ambitions.

Securing Critical Mineral Supply Chains

Chile stands as a significant global exporter of critical minerals like lithium and copper, essential for modern industries. The nation is also a key part of the “Lithium Triangle,” highlighting its importance for global supply.

Negotiations for the CEPA with Chile have advanced through four formal rounds of talks. The current visit seeks to bridge remaining differences, particularly concerning market access and the trade of critical minerals.

• India prioritizes mechanisms within the CEPA to prevent supply disruptions and arbitrary export bans of these crucial resources.
• Chile’s focus, conversely, centers on ensuring in-country processing of its raw mineral exports.

Expanding Trade Relations in the Region

Beyond Chile, Secretary Agrawal is also scheduled to visit Argentina and Brazil. In Argentina, he will participate in a Joint Trade Committee (JTC) meeting to address various trade-related matters.

Discussions with both Argentina and Brazil will concentrate on expanding the existing Preferential Trade Agreement (PTA) between India and Mercosur. This current agreement covers only a limited number of tariff lines, indicating significant room for growth.

This diplomatic effort highlights India’s strategic push to deepen its economic integration with South American nations. The move also aims to secure essential resources vital for India’s industrial growth and energy transition.