Amidst the buzz surrounding India's recent trade agreements, including those with the US and the EU, a lesser-known but potentially transformative free trade agreement (FTA) with Chile is quietly progressing. While not garnering the same level of attention, this FTA holds the promise of providing India with a significant strategic edge, particularly in securing access to critical minerals vital for its manufacturing growth and energy transition.
India is currently in advanced discussions with Chile to establish a comprehensive FTA designed to ensure long-term access to essential critical minerals like lithium, copper, cobalt, and molybdenum. These materials are indispensable for the production of electric vehicles, electronics, and clean energy technologies.
In a world where mineral supply chains are increasingly becoming strategic tools in global politics, this proposed agreement could be a game-changer for India. Securing a stable and reliable supply of these resources is crucial for supporting India's ambitious manufacturing goals and its transition to a cleaner energy future.
The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), which came into effect on October 1, 2025, is another example of India's proactive trade strategy. This agreement with Iceland, Liechtenstein, Norway, and Switzerland, includes a binding commitment from the EFTA nations to invest $100 billion in India over 15 years, with the aim of creating one million direct jobs. The EFTA agreement also reduces tariffs across a broad range of goods, further diversifying India’s access to European markets. Under the terms of the agreement, EFTA states will eliminate or sharply reduce tariffs on the vast majority of imports from India, covering about 99.6% of India's export value to EFTA. India, in turn, will reduce or remove duties on most imports from the EFTA bloc, accounting for roughly 95% of EFTA's export value to India.
Furthermore, India's strategic trade initiatives extend beyond Europe. The Comprehensive Economic Partnership Agreement with Oman, finalized in December 2025, grants immediate zero-duty access for 98% of Indian goods exported to Oman, including agricultural products.
These agreements, including the potential FTA with Chile, reflect a deliberate effort by India to diversify its trade partners, reduce dependence on any single market, and provide its businesses with wider access to customers, investment, and technology. This strategy is particularly important in the context of increasing protectionism, tariff volatility, and geopolitical tensions that have made traditional trade relationships riskier and less predictable.
The FTA with Chile, while still under negotiation, represents a crucial step in securing India's access to vital resources and enhancing its strategic position in the global economy.