Startup Originals Team
India is close to finalising a free trade agreement (FTA) with Chile, Union Minister for Commerce and Industry Piyush Goyal said on Wednesday, highlighting the deal’s strategic importance in securing access to critical minerals and strengthening bilateral trade ties. The proposed agreement is expected to mark a significant step in India’s broader effort to diversify supply chains and deepen economic partnerships with resource-rich nations.
FTA Talks Near Conclusion
Speaking about India’s ongoing trade negotiations, Goyal said discussions with Chile are at an advanced stage and the agreement is likely to be concluded soon. Officials indicated that the deal builds upon the existing preferential trade arrangement between the two countries and aims to significantly expand its scope.
Once finalised, the FTA is expected to reduce tariffs, ease market access, and create a more predictable trade framework for businesses on both sides. The agreement will cover a wider range of goods and services compared to the current limited pact.
Focus on Critical Minerals and Strategic Resources
A key driver behind the India–Chile trade deal is improved access to critical minerals, which are essential for clean energy technologies, electric vehicles, electronics, and advanced manufacturing. Chile is one of the world’s leading producers of minerals such as lithium and copper, both of which are vital for India’s energy transition and industrial growth plans.
Government officials say the FTA could help Indian companies secure long-term, reliable access to these resources, reducing dependence on a narrow set of suppliers and mitigating geopolitical and supply-chain risks.
Boost to Bilateral Trade and Investment
Trade between India and Chile has grown steadily over the past decade but remains below its potential. The proposed FTA is expected to provide a significant boost by lowering duties, simplifying customs procedures, and encouraging investment flows.
Indian exporters in sectors such as pharmaceuticals, engineering goods, textiles, and chemicals are likely to benefit from improved access to the Chilean market. At the same time, Chilean exporters could gain better entry into India for products such as minerals, metals, and agricultural goods.
Industry bodies have welcomed the progress, noting that Chile can serve as a gateway for Indian businesses looking to expand their footprint in Latin America.
Part of India’s Broader Trade Strategy
The Chile agreement fits into India’s wider push to conclude trade deals with key global partners. Over the past few years, India has signed or advanced FTAs with countries and regions including the UAE, Australia, the UK, and the European Free Trade Association.
Officials say these agreements are aimed at boosting exports, integrating India into global value chains, and supporting domestic manufacturing under initiatives such as Make in India and the push for clean energy.
Geopolitical and Economic Significance
Beyond trade, the India–Chile FTA is also seen as strategically important. As competition for critical minerals intensifies globally, securing diversified and friendly sources has become a priority for many countries.
By strengthening economic ties with Chile, India aims to position itself more securely in the global supply chain for future-facing industries such as renewable energy, electric mobility, and advanced electronics.
What Comes Next
While the broad contours of the agreement are nearing completion, officials said final legal texts and domestic approvals are still required before the deal is formally signed and implemented. Once concluded, the FTA is expected to come into force in phases, allowing industries time to adjust.
If finalised as planned, the India, Chile free trade agreement could become a cornerstone of India’s engagement with Latin America, combining economic opportunity with strategic resource security.
