India and Chile Sign ToR for CEPA Negotiations

New Delhi: In a major development that could significantly strengthen bilateral trade and economic relations between India and Chile, the two nations officially signed the Terms of Reference (ToR) for launching negotiations on a Comprehensive Economic Partnership Agreement (CEPA). This milestone, achieved on May 8, 2025, builds upon nearly two decades of progressive economic cooperation and reflects the deepening strategic ties between the two countries.

The Signing of the Terms of Reference

The formal signing ceremony took place in New Delhi, with H.E. Mr. Juan Angulo, Ambassador of Chile in India, and Shri Vimal Anand, Joint Secretary, Department of Commerce, Government of India, signing the Terms of Reference. Shri Anand is also serving as the Chief Negotiator for the India-Chile CEPA from the Indian side.

Both representatives reaffirmed their countries’ commitment to fostering a forward-looking and inclusive economic partnership. They expressed optimism for productive discussions during the first round of CEPA negotiations scheduled from May 26 to 30, 2025, in New Delhi.

Evolution of India-Chile Economic Relations

India and Chile have enjoyed a warm and cooperative relationship for several decades. The trajectory of bilateral trade and investment cooperation has evolved through various stages:

• 2005: A Framework Agreement on Economic Cooperation was signed, laying the foundation for structured trade discussions.
• 2006: A Preferential Trade Agreement (PTA) was signed in March, offering tariff concessions on a set of goods and services.
• 2016: The PTA was expanded and became effective on May 16, 2017, covering a broader range of products and further liberalizing bilateral trade.
• 2019-2021: Three rounds of negotiations were held to further expand the PTA, reflecting the intent of both nations to deepen trade engagement.
• 2024: The Joint Study Group (JSG), created under the original Framework Agreement, finalized its report on April 30, 2024, recommending the initiation of CEPA negotiations.

What is CEPA and Why It Matters

A Comprehensive Economic Partnership Agreement (CEPA) is a broader, more ambitious trade pact than a PTA. It typically includes not just goods and tariff concessions but also services, investments, and regulatory cooperation.

The India-Chile CEPA aims to build upon the existing PTA by incorporating:

• Digital services
• Investment promotion and cooperation
• Micro, Small, and Medium Enterprises (MSMEs)
• Critical minerals and strategic sectors

This broader agenda reflects modern economic realities, especially the importance of digital trade, green technology, and sustainable development.

Strategic and Economic Significance

India and Chile are strategic partners and share common interests in global forums such as the United Nations, World Trade Organization (WTO), and Climate Change platforms. Chile, a leading South American economy with significant reserves of lithium and copper, is seen as a critical partner in India’s push toward green energy and digital infrastructure.

Conversely, Chile sees India as a growing economic powerhouse and a gateway to the vast Asian market. The CEPA will help in:

• Reducing trade barriers
• Facilitating smoother investment flows
• Enhancing supply chain integration
• Boosting employment and MSME participation

Political Will and High-Level Support

The signing of the ToR for CEPA follows the State Visit of Chilean President H.E. Mr. Gabriel Boric Font to India from April 1 to 5, 2025, at the invitation of Prime Minister Narendra Modi. During the visit, both leaders acknowledged the importance of trade and commerce as foundational pillars of the bilateral relationship.

They jointly emphasized the need to strengthen the existing trade framework and unlock new avenues for inclusive and sustainable growth. The mutual agreement to move forward with CEPA negotiations symbolizes this shared vision.

Current Bilateral Trade Snapshot

As of 2024, the India-Chile bilateral trade is valued at approximately USD 3.5 billion, with significant exports and imports in the following sectors:

• India’s Exports to Chile: Pharmaceuticals, automobiles, textiles, IT services, engineering goods
• Chile’s Exports to India: Copper, lithium, fresh fruits, wine, and fish products

The CEPA is expected to diversify trade, improve market access, and foster technology transfer across sectors.

Way Forward: The Road to CEPA

With the first round of negotiations scheduled for late May 2025 in New Delhi, both countries have embarked on a path toward greater economic integration. The CEPA process is likely to involve:

• Multiple rounds of negotiations involving tariff structures, investment protocols, and regulatory standards
• Consultations with domestic industry stakeholders to ensure balanced and inclusive outcomes
• Focus on sustainability, digital economy, and women-led enterprises as cross-cutting themes

If concluded successfully, this agreement could serve as a model trade pact between South Asia and Latin America.

📌 Conclusion

The signing of the Terms of Reference for India-Chile CEPA marks a turning point in bilateral economic relations. With a comprehensive and forward-looking agenda, the CEPA holds the potential to elevate the partnership to a strategic level, not just through trade and investment, but by fostering cooperation in innovation, sustainability, and global governance.

As both democracies move toward an increasingly interconnected global economy, the India-Chile CEPA could well become a template for future transcontinental trade partnerships, blending mutual benefit with shared values.

Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2127826