India, Chile announce start of negotiations for comprehensive trade pact

NEW DELHI: India and Chile on Tuesday announced they will begin negotiations for a comprehensive trade pact as Prime Minister Narendra Modi and Chilean President Gabriel Boric explored new avenues for cooperation in defence, critical minerals and technology.

The proposed comprehensive economic partnership agreement (CEPA) will build on a Preferential Trade Agreement that India concluded with Latin America’s fifth-largest economy in May 2017. The move is also in line with New Delhi’s focus on South America, where India has expanded its diplomatic footprint in recent years.

At a media interaction after his talks with Boric, Modi described Chile as India’s “valued friend and partner country” in Latin America and said there is untapped potential in trade and investment. “Today, we have instructed our teams to initiate discussions on a mutually beneficial comprehensive economic partnership agreement,” he said, speaking in Hindi.

Boric cited India as a priority partner in the global economy and said the diversity of Chile’s economy and the country’s natural resources such as lithium and copper create grounds for economic cooperation at a time when “there are threats at the world level”. He added, “We are going to have a CEPA and work together in a collaborative manner to strengthen our mutual benefits, which are going to be fundamental in a world that is evolving and talking about free trade.”

Two-way trade between India and Chile was worth $2.6 billion in 2022-23, with India’s exports valued at $1.16 billion. India currently ranks ninth among Chile’s export partners.

Modi said the two sides identified several initiatives to strengthen cooperation in the coming decade, including partnerships in critical minerals and establishing resilient supply and value chains.

“In agriculture, we will collaborate to enhance food security by leveraging each other’s strengths,” Modi said, adding that India is ready to share its expertise in digital public infrastructure, renewable energy, railways and space with Chile.

“We see Chile as the gateway to Antarctica. We welcome today’s agreement on the letter of intent to strengthen cooperation in this vital region,” he said.

Boric, the first Chilean head of state to visit India in 16 years, invited Modi to visit Antarctica, where India has maintained two research stations since 1989. He also backed India’s bid to become a permanent member of a reformed UN Security Council.

Besides the letter of intent for cooperation in Antarctica, Hindustan Copper and the National Copper Corporation of Chile (Codelco) signed a memorandum of understanding for cooperation. There were also agreements for cooperation in disaster management and cultural exchanges.

A joint statement said the two sides will explore “substantial areas for bilateral defence cooperation”, including capacity building and defence industrial collaboration. They agreed to share knowledge under an existing formal defence cooperation agreement.

“Increasing cooperation in defence is a symbol of our deep mutual trust. In this area, we will move forward to create defence industrial manufacturing and supply chains as per each other’s needs,” Modi said.

“We will increase cooperation between the agencies of both countries to face common challenges like organised crime, drug trafficking and terrorism,” he added.

Modi also said that India and Chile agree that “all tensions and disputes should be resolved through dialogue” and noted the two sides are unanimous that reform of the UN Security Council and other institutions is essential to face global challenges.

The two leaders agreed to accelerate collaboration in exploration and processing of critical minerals, along with research and development to promote investments across the entire value chain, the joint statement said.

The leaders also stressed the need to build trusted and resilient supply chains, including for critical minerals and advanced materials. The two sides will foster mutually beneficial partnerships in mining and minerals, including long-term supply of minerals from Chile.

The two sides further agreed to facilitate their private sectors to increase trade in pharmaceuticals, vaccines and medical devices, and address market access issues for Indian pharmaceuticals, the joint statement said.

Boric, who is accompanied by a delegation comprising ministers, lawmakers and business leaders, is on a five-day state visit that will also take him to Agra, Mumbai and Bengaluru.