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Recently, India and Chile signed the Terms of Reference (ToR) to initiate negotiations for a Comprehensive Economic Partnership Agreement (CEPA), marking a significant step toward deepening bilateral economic ties.

Background and Significance

• The CEPA aims to expand and build upon the existing Preferential Trade Agreement (PTA) between the two countries by covering a broader range of sectors including digital services, investment promotion, MSMEs, and critical minerals.
• India and Chile share warm, strategic bilateral relations strengthened over years through high-level exchanges. The economic partnership began with a Framework Agreement in 2005, followed by a PTA in 2006, an expanded PTA effective from 2017, and further discussions towards CEPA since 2019.
• A Joint Study Group report finalized in April 2024 laid the foundation for advancing to a CEPA to unlock the full trade and investment potential between the two nations.
• The recent State visit of Chile’s President Gabriel Boric Font to India in April 2025 reaffirmed both countries’ commitment to enhancing trade frameworks and fostering a balanced, ambitious, and mutually beneficial economic agreement.

About Chile: Geopolitical and Economic Profile

• Chile is a long, narrow South American country bordered by Peru and Bolivia to the north, Argentina to the east, and the Pacific Ocean to the west.
• It shares the longest border in South America with Argentina, which is also the third-longest international border worldwide.
• Key geographical features include the Andes Mountains (the world’s longest continental mountain range), the Atacama Desert (driest non-polar desert globally), the Loa River (Chile’s longest river, approx. 440 km), and Ojos del Salado volcano (world’s highest active volcano at 6,880 meters).
• Situated on the Pacific Ring of Fire, Chile is prone to frequent earthquakes and tsunamis.
• Chile is the world’s largest producer of copper and a significant member of the “Lithium Triangle” (alongside Argentina and Bolivia), holding over 75% of global lithium reserves found in salt flats.
• Other important resources include molybdenum, iron ore, timber, hydropower, and precious metals.

Importance for India

• The CEPA negotiations with Chile are expected to enhance trade and investment flows, promote MSMEs, and strengthen cooperation in critical sectors such as minerals and digital services.
• This move aligns with India’s broader strategy to diversify economic partnerships globally and deepen ties with Latin American countries.
• Enhanced economic integration with Chile will boost employment, trade balance, and strategic cooperation between the two nations.