India and Chile on Friday signed the terms of reference for a Comprehensive Economic Partnership Agreement (CEPA), marking a significant advancement in their bilateral trade relations.

“Both sides reiterated their shared vision for strengthening bilateral relations and look forward to fruitful discussions during the first round scheduled for 26-30th May, 2025 in New Delhi,” said the ministry of commerce and industry.

The CEPA aims to build upon the existing Preferential Trade Agreement (PTA) between the two nations and seeks to encompass a broader range of sectors, including digital services, investment promotion and cooperation, MSME, critical minerals, etc., thereby enhancing economic integration and cooperation, the ministry said.

India’s exports to Chile are diversified and constitute motor vehicles, drug formulations, chemicals, yarn, cotton, auto components, electric machinery, leather goods, rubber products, drugs, footwear, iron, steel, aluminium, and ceramics, among others.

India and Chile are strategic partners and close allies, sharing warm and cordial relations, said the commerce ministry. “Bilateral ties have steadily strengthened over the years with the exchange of high-level visits. A Framework Agreement on Economic Cooperation was signed between the two countries in January 2005, followed by a Preferential Trade Agreement (PTA) in March, 2006. Since then economic and commercial relations between India and Chile have remained robust and continue to grow,” it added.

An expanded Preferential Trade Agreement was subsequently signed in September 2016 and became effective from May 16, 2017. In April 2019, both countries agreed to pursue a further expansion of the PTA with three rounds of negotiations between the years during 2019-2021. To deepen their economic engagement, both sides expressed their intention to negotiate a CEPA to unlock the full potential of their trade and commercial relationship, boosting employment, facilitating investment promotion, and cooperation and exports, as suggested by the Joint Study Group established under the Framework Agreement. The JSG report was finalised and signed on April 30, 2024.

“This shared vision was reaffirmed during the recent State visit of the President of Chile Gabriel Boric Font to India from 1-5 April, 2025, on an invitation from Prime Minister of India Narendra Modi. Leaders from both sides acknowledged that trade and commerce has served as a strong pillar of the bilateral relationship. They emphasized the importance of enhancing the existing trade framework to unlock new opportunities for growth. In this spirit, the two leaders acknowledged the signing of the mutually agreed Terms of Reference (ToR) and welcomed the launch of negotiations for a CEPA, aiming to establish a balanced, ambitious, comprehensive, and mutually beneficial agreement for a deeper economic integration,” the ministry said.

The mutually agreed terms of reference were signed by Juan Angulo, Ambassador of Chile in India, and Vimal Anand, Joint Secretary, Department of Commerce, Ministry of Commerce & Industry, Government of India. Anand is also the Chief Negotiator for the India-Chile CEPA from the Indian side.

India’s exports to Chile had been growing steadily since 2009, with the exception of a slight decrease in 2014, when a new carbon tax on diesel vehicles in Chile adversely affected motor vehicle exports from India, but the sector saw a big recovery later on. India’s trade with Chile registered a negative growth over a couple of years due to the global slowdown and the domestic social crisis and labour unrest in Chile. The trade has since picked up and shown a robust recovery.