India and Chile Take Major Step Towards Comprehensive Economic Partnership Agreement

India and Chile have formalized a major step in advancing their bilateral economic relationship with the signing of the Terms of Reference (ToR) for a Comprehensive Economic Partnership Agreement (CEPA) on 8 May 2025. This landmark development underscores both countries’ shared commitment to deepening economic integration and expanding cooperation across diverse sectors.

The ToR signing ceremony was marked by the presence of H.E. Mr. Juan Angulo, the Ambassador of Chile to India, and Shri Vimal Anand, Joint Secretary at the Department of Commerce, Ministry of Commerce & Industry, Government of India, who also serves as the Chief Negotiator for the CEPA from the Indian side. The two dignitaries jointly endorsed the roadmap for the CEPA, which will now serve as the guiding framework for future negotiations.

Strengthening a Long-Standing Economic Partnership

India and Chile enjoy a warm and steadily growing partnership, reinforced through frequent high-level exchanges and institutional frameworks that have matured over the last two decades. The signing of a Framework Agreement on Economic Cooperation in January 2005 laid the foundation for structured trade discussions. This was followed by the launch of a Preferential Trade Agreement (PTA) in March 2006, which catalyzed trade liberalization between the two countries.

The PTA was significantly expanded in September 2016, coming into effect on 16 May 2017, and was further strengthened through three rounds of negotiations between 2019 and 2021 aimed at deepening trade concessions. In April 2019, both nations agreed to explore the feasibility of a CEPA, and a Joint Study Group (JSG) was formed under the original framework to conduct an in-depth evaluation of the potential agreement.

The JSG concluded its work with a comprehensive report, finalized and signed on 30 April 2024, which recommended the negotiation of a CEPA to enhance bilateral trade, investment, and economic cooperation.

Towards a Modern, Broad-Based Trade Agreement

The CEPA as envisioned will build upon the existing PTA, and aims to broaden its scope far beyond conventional trade in goods. According to the signed ToR, the upcoming agreement will cover a wide spectrum of areas, including:

• Digital services and e-commerce

• Investment promotion and protection

• MSME collaboration

• Cooperation in critical minerals and sustainable development

• Trade in goods and services with expanded tariff concessions

This comprehensive approach is intended to unlock new areas of cooperation and ensure a balanced, inclusive, and mutually beneficial framework that supports economic growth, job creation, and innovation in both nations.

Political Will and Shared Vision

The recent State Visit of Chilean President H.E. Mr. Gabriel Boric Font to India from 1–5 April 2025 served as a significant diplomatic moment that reaffirmed both sides' enthusiasm for a deeper economic partnership. At the invitation of Prime Minister Shri Narendra Modi, President Boric Font engaged in a series of high-level meetings, during which both leaders agreed that economic cooperation remains a cornerstone of India-Chile relations.

Both leaders expressed optimism about the CEPA, recognizing it as a vital mechanism to deepen market access, enhance supply chain resilience, and foster sustainable economic development. They jointly emphasized the need for a forward-looking agreement that reflects 21st-century economic realities and maximizes mutual benefit.

Next Steps: First Round of CEPA Negotiations

The first round of formal CEPA negotiations is scheduled to take place from 26–30 May 2025 in New Delhi, marking the official launch of detailed talks. These discussions will be steered by designated negotiation teams from both countries, guided by the principles set out in the ToR.

Given the historic depth and the current momentum in India-Chile relations, the CEPA negotiations are expected to proceed with strong political backing, technical preparedness, and a shared ambition to forge a resilient economic alliance for the future.