India and Chile have signed the Terms of Reference (ToR) to negotiate a Comprehensive Economic Partnership Agreement (CEPA), aimed at expanding the existing Preferential Trade Agreement (PTA) into a broader, deeper, and mutually beneficial trade and economic partnership.
Key Highlights
- Purpose of CEPA: To build on the existing PTA by including wider economic sectors such as:
- Digital services & e-commerce
- Investment promotion & protection
- MSME cooperation
- Critical minerals & sustainable development
- Trade in goods and services with expanded tariff concessions
- Objective: A balanced, ambitious, and comprehensive framework for deeper integration, innovation, job creation, and inclusive growth.
- Significance: This CEPA will support:
- Diversification of trade
- Economic cooperation
- Value chain integration in emerging sectors
India–Chile Economic Relations: Background
| Agreement Type | Year | Details |
| Framework Agreement on Economic Cooperation | Jan 2005 | Initiated bilateral economic ties |
| Preferential Trade Agreement (PTA) | Mar 2006 | First trade agreement signed |
| Expanded PTA | Sep 2016 | Came into force on 16 May 2017 |
| Negotiations for further PTA expansion | 2019–2021 | 3 rounds held |
| Joint Study Group (JSG) Report | Signed on 30 April 2024 | Recommended CEPA |
| CEPA ToR Signed | May 2025 | Official beginning of CEPA talks |
Bilateral Trade Snapshot
- Total Bilateral Trade (FY 2024–25, till Feb):
$3.6 billion - Compared to 2016–17:
Doubled from $1.8 billion - Trade Deficit (India):
Approx. $2.5 billion (India imports more from Chile)
Strategic Importance of CEPA
- Expands economic engagement beyond goods to services, digital economy, and sustainable sectors.
- Supports India’s interests in accessing critical minerals, digital markets, and promoting MSME global linkages.
- Enhances India’s FTA footprint as it finalises similar deals (e.g. with UK).