As India seeks to conclude its Free Trade Agreement (FTA) negotiations with Chile, it is facing a balancing act between securing access to the country’s critical minerals and protecting its domestic agricultural sector, people aware of the matter said.
Chile is seeking greater market access in India for a handful of agricultural and horticultural products, while India remains cautious about opening up its farm sector, the people said.
“Chile is a major producer of some agricultural and horticultural products such as walnuts and salmon. So, they are pushing for those 7-8 items. India is trying to balance their demands and also secure access to critical minerals,” a source said.
The two countries are in the final round of negotiations and are looking to conclude the deal next month. However, a government source said Chile’s existing law does not allow it to provide preferential treatment to individual countries for critical minerals.
The two sides are therefore exploring ways to accommodate their respective interests within the proposed Comprehensive Economic Partnership Agreement (CEPA). “The talks are stuck around market access from their side,” a government source said.
Following China’s restrictions on critical mineral exports, India has been seeking to diversify its supply chains and secure alternative sources of critical minerals, including rare earths, from countries across the world.
India and Chile are negotiating an upgrade of their existing preferential trade agreement into a CEPA, with securing access to critical minerals and building resilient rare earth supply chains emerging as key strategic priorities.
India is also looking to expand its existing preferential trade agreement with the Mercosur bloc, comprising Argentina, Bolivia, Brazil, Paraguay and Uruguay, with a focus on critical minerals and rare earths.
Sources said Brazil has become somewhat more “inward-looking” amid the current geopolitical situation, particularly in relation to the US. Argentina, however, has expressed interest in a side agreement with India and is pushing to conclude negotiations within six months.
