Strategic Analysis Division
The global economy is shifting towards green technologies and resilient supply chains, driven by the escalating demand for critical minerals essential for electric vehicles (EVs), renewable energy infrastructure, and advanced electronics. India, with its ambitious industrial and clean energy targets, is strategically enhancing its engagement with resource-rich nations.
A Comprehensive Economic Partnership Agreement (CEPA), essentially an India-Chile critical minerals FTA, is nearing finalization. This pact aims to secure India’s access to vital critical minerals, diversify its supply chains away from concentrated sources, and deepen broader economic ties. For Chile, a nation rich in minerals, the agreement promises enhanced market access and economic diversification.
“Negotiations are nearing conclusion, building upon an existing Preferential Trade Agreement (PTA) that has served as the bedrock of our bilateral relationship since 2007.”
India’s Critical Minerals Quest: Fueling Green Growth
India’s economic growth relies heavily on a secure supply of critical minerals. In 2023, the Ministry of Mines identified 30 such minerals, including lithium, cobalt, nickel, copper, graphite, and rare earth elements.
EV Mobility
Essential components for high-density lithium-ion batteries.
Renewables
Fundamental for solar photovoltaic cells and wind turbine magnets.
India is almost entirely import-dependent—100% for lithium, cobalt, and nickel. To address this, the National Critical Mineral Mission (NCMM) was launched in 2024, prioritizing supply chain resilience through domestic exploration and overseas acquisitions.
Chile: Global Powerhouse & Strategic Partner
Chile’s mineral wealth makes it an indispensable partner. Its leadership in the global mining sector is defined by:
- Copper Dominance: The undisputed world leader in copper production.
- Lithium Leadership: Holds over a third of global reserves and is the second-largest producer.
- Diverse Strategic Minerals: Top producer of rhenium and molybdenum.
Chile’s National Critical Minerals Strategy identifies 14 minerals vital for the future, perfectly aligning with India’s industrial requirements.
India-Chile Trade Evolution
The relationship has evolved from a modest Preferential Trade Agreement (PTA) in 2007 to an expanded accord in 2016 that covered 96% of bilateral trade.
The shift to a CEPA was driven by strategic necessity. In 2024-25, total trade volume doubled to US$3.6 billion. While India faces a trade deficit due to mineral procurement, the depth of the partnership allows for a more balanced exchange in services and technology.
Key Pillars of the FTA
The CEPA is designed with several strategically aligned pillars:
- Secure Access: Guaranteed supply lines for lithium, copper, and cobalt.
- Investment Promotion: Direct equity opportunities for Indian entities like KABIL in Chilean mining.
- MSME Support: Integrating small enterprises into the global mineral value chain.
- Sustainable Mining: Collaboration on environmentally responsible extraction techniques.
Global Impact & Future Outlook
The India-Chile CEPA is more than a trade deal; it is a blueprint for South-South cooperation. It contributes to a more multipolar and resilient global supply network, reducing over-reliance on single-source suppliers.
As both nations navigate challenges like competition in Latin American markets and the need for ethical sourcing, the FTA remains a transformative tool for India’s emergence as a global manufacturing powerhouse and Chile’s economic diversification.
Bilateral Snapshot
Total Trade US $3.6B
India Imports US $2.6B
Lithium Reserve#1 Global
India’s Dependence
India is currently 100% dependent on imports for several mission-critical minerals:
Lithium
Cobalt
Nickel
Key Entities
- KABIL Khanij Bidesh India Limited – Leading overseas acquisitions.
- ENAMI Chile’s state-owned mining giant and strategic partner.
- NCMM National Critical Mineral Mission (est. 2024).
Explore the Future of Trade
“The India-Chile CEPA is a pivotal moment, securing essential resources for growth while offering economic prosperity and diversification.”
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