India and Chile are nearing the completion of a proposed trade agreement, with critical minerals such as lithium and copper emerging as a major strategic priority for New Delhi. The pact is being negotiated as India seeks to diversify supplies of minerals needed for electric vehicles, batteries, renewable energy, electronics and advanced manufacturing.
The proposed agreement would build on the existing India-Chile preferential trade arrangement and could deepen access to the Chilean market while creating a framework for greater cooperation in strategic minerals. India and Chile have already reaffirmed their commitment to an early conclusion of a Comprehensive Economic Partnership Agreement (CEPA).
For India, the mineral component is particularly important because Chile is one of the world’s most significant sources of copper and lithium. The country is the world’s largest copper producer and holds some of the largest lithium resources globally.
Trade talks enter a strategically important phase
India and Chile have been negotiating an expanded trade agreement as New Delhi broadens its network of trade partners across Latin America.
The two countries already have a preferential trade agreement that was implemented in 2006. The proposed CEPA would substantially broaden the scope of that relationship to include wider market access, investment and strategic cooperation.
INDIA–CHILE TRADE RELATIONSHIP
2006
Preferential Trade Agreement
↓
Expanded trade engagement
↓
CEPA negotiations
↓
Market access + investment
+
Critical minerals
↓
Strategic economic partnership
Chile’s foreign minister led a high-level delegation to India in May 2026, during which both sides reaffirmed their commitment to concluding the CEPA at an early date.
Why critical minerals are at the centre
The biggest strategic attraction for India is Chile’s mineral wealth.
Chile is particularly important for:
- Copper
- Lithium
- Other critical minerals
- Clean-energy supply chains
- Mining investment
India’s demand for these materials is expected to increase sharply as it expands electric vehicles, battery manufacturing, renewable power, electronics and advanced industrial production.
INDIA'S MANUFACTURING PUSH
↓
EVs + batteries
+
Renewable energy
+
Electronics
+
Semiconductors
+
Defence technology
↓
Higher mineral demand
↓
Need diversified imports
↓
CHILE
Chile’s own 2026 National Critical Minerals Strategy explicitly seeks to position the country as a reliable global supplier of critical minerals and promote diversification, responsible mining and international mineral diplomacy.
Chile’s copper advantage
Copper is likely to become increasingly important for India.
Copper is used extensively in:
- Power transmission
- Electric vehicles
- Motors
- Charging infrastructure
- Renewable-energy equipment
- Electronics
- Industrial machinery
- Data centres
The scale of India’s future requirement is already visible.
Reuters reported that India currently produces around 573,000 tonnes of refined copper annually, while domestic demand is approximately 1.8 million tonnes. The gap means India is increasingly dependent on imported copper and concentrates.
INDIA'S COPPER MARKET
Domestic refined production
~573,000 tonnes
████████
Demand
~1.8 million tonnes
█████████████████████████
Large supply gap
↓
Higher import dependence
↓
Need reliable suppliers
↓
Chile becomes strategically important
Copper could become a major part of the India-Chile relationship
India’s growing copper deficit is one reason the proposed trade agreement could have implications beyond traditional merchandise trade.
India is already exploring deeper cooperation with Chilean state copper giant Codelco.
Reuters reported that Hindustan Copper is in discussions over a potential joint venture with Codelco to mine and market copper, while Indian companies including Hindalco and Adani could potentially receive Chilean copper concentrate.
CHILE
Codelco mines
↓
Copper concentrate
↓
Potential India supply
↓
Hindustan Copper
↓
Indian refiners / manufacturers
↓
EV + power + electronics
The potential mining partnership is separate from the trade agreement and has not been publicly confirmed by all parties, but it demonstrates the growing strategic depth of the relationship.
Lithium is the other major attraction
Chile is also strategically important because of its enormous lithium resources.
Lithium is a critical input for many rechargeable batteries used in:
- Electric cars
- Electric scooters
- Energy storage systems
- Smartphones
- Laptops
- Industrial batteries
LITHIUM
↓
Battery cells
↓
Battery packs
↓
EVs / storage
↓
Clean-energy transition
India wants to build a larger domestic EV and battery ecosystem, but its limited domestic reserves and processing capabilities mean overseas mineral partnerships will remain important.
Why India needs to diversify mineral supplies
Critical-mineral supply chains are highly concentrated globally.
This creates risks for countries that depend heavily on a small number of suppliers or processing hubs.
India is therefore pursuing agreements with several countries to secure access to mining, processing, recycling and investment opportunities. Reuters reported earlier this year that India was discussing critical-mineral partnerships with countries including Brazil, Canada, France and the Netherlands.
The United States and India also signed a critical-minerals framework in May 2026 covering supply, mining, processing, recycling and investment.
INDIA'S CRITICAL MINERALS STRATEGY
Chile
+
USA
+
Australia
+
Argentina
+
Canada
+
Other partners
↓
Diversified mineral supply
↓
Lower concentration risk
Chile therefore forms part of a much broader Indian strategy.
Reducing dependence on concentrated supply chains
The goal is not necessarily to eliminate imports.
Instead, India wants to avoid becoming dependent on one country or one processing network.
This is especially important because critical minerals are increasingly viewed as strategic assets rather than ordinary commodities.
Old model
Single / concentrated supplier
↓
Supply disruption
↓
Industrial shock
New model
Multiple suppliers
↓
Diversified sourcing
↓
Greater resilience
China’s role makes diversification more urgent
China has a dominant position in the processing and refining of several critical minerals.
India’s efforts to build alternative supply chains therefore have an important geopolitical dimension.
By developing relationships with resource-rich countries such as Chile, India can potentially secure raw materials outside highly concentrated supply chains.
However, securing ore is only one part of the challenge.
Mine
↓
Concentrate
↓
Refining
↓
Processing
↓
Component manufacturing
↓
Final product
India needs capabilities across this entire chain if it wants mineral security to translate into manufacturing competitiveness.
Trade agreement could make mineral imports easier
A broader trade agreement could potentially reduce tariffs and improve market access for selected products.
For critical minerals, lower trade barriers could help Indian companies source raw materials more competitively.
The exact tariff concessions and product coverage will depend on the final CEPA.
CEPA
↓
Lower trade barriers
↓
Better market access
↓
Potentially cheaper / easier sourcing
↓
More Indian mineral imports
↓
Domestic manufacturing
It is important, however, not to assume that every mineral will automatically receive zero tariffs. Final terms have yet to be announced.
India is also looking for investment opportunities
The relationship is not limited to buying minerals.
India wants its companies to participate in mining and mineral projects overseas.
The Indian Embassy in Santiago said discussions with Chilean authorities in June focused on lithium and other critical minerals, investment opportunities and cooperation in strategic resource sectors.
That could eventually create a model where Indian companies invest directly in Chilean mines or processing projects.
Indian company
↓
Investment in Chile
↓
Mining project
↓
Long-term mineral supply
↓
Indian manufacturing
Such arrangements can provide more predictable access than purchasing minerals only through spot markets.
India-Chile cooperation is expanding beyond minerals
Critical minerals may be the strategic centrepiece, but the proposed CEPA covers a much broader economic relationship.
Areas under discussion include:
- Trade
- Investment
- Market access
- Mining
- Renewable energy
- Pharmaceuticals
- Agribusiness
- Logistics
- Digital services
- Advanced manufacturing
The Indian Embassy in Santiago highlighted these sectors as areas of growing bilateral cooperation.
What Chile gets from the relationship
The deal is not a one-way arrangement.
Chile also wants greater access to India’s huge consumer and industrial market.
Indian companies could potentially increase purchases of Chilean commodities while Chilean businesses gain opportunities to sell more products and services in India.
CHILE
Minerals + commodities
↓
INDIA
Large consumer + industrial market
↓
Indian goods + services
↓
CHILE
A trade agreement could therefore help both sides diversify their economic relationships.
India’s Latin America strategy
India has historically had smaller trade volumes with Latin America compared with its relationships with Europe, the United States and Asia.
That is changing.
New Delhi is increasingly looking at Latin America as a source of:
- Critical minerals
- Energy
- Agricultural commodities
- Investment opportunities
- New export markets
Chile is strategically attractive because it combines mineral resources with relatively strong institutions and an established international trade network.
Why Chile is particularly valuable
Chile already has extensive trade agreements around the world.
Its economy is deeply integrated into global commodity markets.
For India, partnering with Chile can therefore provide access not only to raw materials but also to a country with significant experience in international mining and trade.
CHILE
Resource wealth
+
Global trade links
+
Mining expertise
+
Critical minerals
↓
Strategic partner for India
The EV industry could be a major beneficiary
India’s electric-vehicle industry requires reliable supplies of battery materials.
The potential chain is straightforward:
Chile
Lithium
↓
Indian battery industry
↓
Battery cells
↓
Battery packs
↓
EV manufacturers
↓
Electric cars + scooters
Copper is also essential to EVs because electric vehicles generally require substantial quantities of copper for motors, wiring and electrical systems.
This means the India-Chile relationship could eventually influence both the battery and electrical infrastructure sides of India’s EV transition.
Renewable energy is another major beneficiary
India’s renewable-energy expansion will also increase demand for copper and other critical minerals.
Solar farms, wind turbines, transmission lines, energy-storage systems and grid infrastructure all require large amounts of metals.
Renewable energy expansion
↓
More transmission
+
More storage
+
More generation equipment
↓
Higher mineral demand
A secure supply of minerals therefore becomes part of India’s broader energy-security strategy.
Electronics and advanced manufacturing
Critical minerals are also important for India’s ambitions in electronics manufacturing.
India is expanding production of:
- Smartphones
- Electronics
- Semiconductor-related products
- Telecommunications equipment
- Industrial electronics
These sectors require reliable access to specialised minerals and metals.
A stronger relationship with Chile could help diversify raw-material sourcing as India’s manufacturing ecosystem expands.
The agreement could support India’s “China+1” strategy
Global manufacturers are increasingly looking to diversify supply chains beyond China.
India wants to position itself as a major alternative manufacturing base.
But manufacturing diversification requires raw-material diversification too.
China+1 manufacturing
↓
More production in India
↓
Higher raw-material demand
↓
Need diversified mineral sources
↓
Chile + other mineral partners
The India-Chile agreement could therefore complement India’s broader strategy to become a more important global manufacturing hub.
Trade agreement is not the same as mineral security
There is an important limitation.
Signing a trade agreement does not automatically create mines, refineries or battery factories.
Critical-mineral projects often require:
- Large capital investments
- Geological exploration
- Environmental approvals
- Infrastructure
- Processing technology
- Long-term contracts
- Skilled workforce
Some mining projects can take years before commercial production begins.
Reuters reported that potential copper production from the proposed India-Codelco partnership could take around a decade.
Trade agreement
↓
Investment decision
↓
Exploration
↓
Mine development
↓
Infrastructure
↓
Production
↓
Indian supply
Therefore, the CEPA would be a foundation rather than an immediate solution to India’s mineral requirements.
Processing is just as important as mining
One of India’s biggest challenges is that securing raw minerals does not guarantee control over the supply chain.
A country can own or buy ore but still depend on foreign facilities for:
- Refining
- Chemical processing
- Battery-grade material production
- Component manufacturing
India will therefore need to develop domestic processing capacity alongside overseas mining partnerships.
India’s copper challenge illustrates the problem
India currently produces around 573,000 tonnes of refined copper against demand of approximately 1.8 million tonnes, according to Reuters.
That gap illustrates why mineral diplomacy is becoming increasingly important.
If demand continues rising, India could require substantially larger volumes of imported copper concentrate.
By 2047, Reuters reported that India could import 91%-97% of its copper concentrates, highlighting the scale of the potential future dependency.
CURRENT
Demand ~1.8 Mt
Production ~0.573 Mt
FUTURE
Growing EV + power + electronics demand
↓
Higher copper requirement
↓
Higher imports
↓
Need long-term suppliers
Chile could become a long-term strategic supplier
The combination of Chile’s mineral resources and India’s rapidly increasing demand creates a natural strategic fit.
CHILE
Resource-rich
+
INDIA
Demand-rich
↓
Trade + investment
↓
Long-term mineral partnership
This is why critical minerals have moved from being a niche trade issue to a major diplomatic priority.
Key numbers and facts
| Indicator | Detail |
|---|---|
| India-Chile trade framework | Existing PTA since 2006 |
| Proposed new pact | Comprehensive Economic Partnership Agreement (CEPA) |
| Chile’s key minerals | Copper, lithium |
| India’s refined copper production | ~573,000 tonnes/year |
| India’s copper demand | ~1.8 million tonnes/year |
| Potential future copper concentrate import dependence | 91%-97% by 2047 |
| Potential Codelco mining timeline | ~10 years to production |
| Major Indian focus | Critical minerals + investment + market access |
India-Chile trade deal: what each side wants
| India | Chile |
|---|---|
| Critical minerals | Access to Indian market |
| Lithium | More investment |
| Copper | Expanded exports |
| Mining partnerships | Diversified trade |
| Supply-chain security | Greater commercial ties |
| EV/battery inputs | New business opportunities |
| Manufacturing inputs | Long-term Indian partnership |
The strategic significance
The proposed CEPA arrives at a time when countries worldwide are competing for secure access to critical minerals.
These materials are becoming essential to the technologies that will define the next decade:
Critical minerals
↓
Batteries
↓
EVs
↓
Renewable energy
↓
Power grids
↓
Electronics
↓
Defence + advanced technology
That makes mineral access increasingly connected to national economic and technological security.
India’s critical-mineral diplomacy is accelerating
The Chile talks are part of a much wider Indian strategy.
New Delhi has been exploring mineral partnerships with multiple countries while also strengthening domestic exploration and processing.
India’s May 2026 critical-minerals framework with the United States, for example, covers mining, processing, recycling and investment.
The Chile relationship adds another important resource-rich partner to this network.
What could happen after the agreement?
If the CEPA is finalised, the next stage could involve:
CEPA signed
↓
Tariff / market-access implementation
↓
Indian companies explore Chilean opportunities
↓
Mining + investment agreements
↓
Long-term supply contracts
↓
Mineral shipments to India
↓
Domestic processing
↓
EV + electronics + renewable manufacturing
The commercial impact would therefore unfold gradually rather than immediately.
What investors should watch
Several developments will determine whether the agreement becomes economically significant.
1. Final CEPA terms
Which products receive tariff concessions?
2. Critical-mineral provisions
Will copper and lithium receive specific trade or investment treatment?
3. Indian mining investments
Will Indian companies acquire stakes in Chilean projects?
4. Codelco partnership
Will the proposed Hindustan Copper-Codelco cooperation become a formal project?
5. Processing capacity
Can India build enough domestic refining and processing infrastructure?
6. Battery manufacturing
Will mineral access translate into competitive battery production?
7. EV demand
Higher EV adoption could significantly increase demand for lithium and copper.
The biggest challenge: execution
The agreement could create a framework, but execution will determine its value.
India needs to move from:
trade negotiations → mining investment → mineral supply → domestic processing → manufacturing.
NEGOTIATION
↓
AGREEMENT
↓
INVESTMENT
↓
MINING
↓
PROCESSING
↓
MANUFACTURING
↓
EXPORTS
If any major link remains weak, the strategic benefit will be limited.
Why the deal matters beyond India and Chile
The agreement could contribute to the broader reshaping of global critical-mineral supply chains.
As countries seek to reduce concentration risks, resource-rich nations such as Chile are gaining greater strategic importance.
For India, the objective is to secure the materials needed to expand manufacturing without becoming excessively dependent on any single external supplier.
For Chile, closer ties with India provide another major market and investment partner.
Conclusion
India and Chile are moving closer to concluding a broader trade agreement, with critical minerals emerging as one of the most strategically important elements of the relationship. Both countries have reaffirmed their commitment to an early conclusion of the proposed Comprehensive Economic Partnership Agreement, which would expand on their existing preferential trade arrangement dating back to 2006.
For India, the biggest attraction is Chile’s position as a major global source of copper and lithium. These minerals are becoming increasingly important as India expands electric vehicles, batteries, renewable energy, power infrastructure, electronics and advanced manufacturing.
Copper is particularly urgent. India currently produces around 573,000 tonnes of refined copper annually against demand of about 1.8 million tonnes, leaving a substantial supply gap. Reuters has also reported that India’s dependence on imported copper concentrates could reach 91%-97% by 2047.
Lithium presents another strategic opportunity because it is essential for rechargeable batteries used in electric vehicles and energy-storage systems. Access to Chilean resources could therefore support India’s long-term effort to build domestic battery and EV supply chains.
The relationship is already moving beyond trade negotiations. Indian officials and companies are discussing investment opportunities in Chile’s critical-minerals sector, while Hindustan Copper is exploring potential cooperation with Chile’s Codelco on copper mining and marketing. Any such mining project would have a long development timeline, meaning the benefits would take years rather than months to materialise.
The agreement also fits into India’s broader strategy of diversifying critical-mineral supplies. New Delhi has been pursuing partnerships with countries including the United States, Canada, Brazil and others, while simultaneously trying to strengthen domestic mining, refining, recycling and processing capabilities.
The key point is that a trade agreement alone will not solve India’s critical-mineral problem. The real benefit will come if lower trade barriers lead to Indian investment in Chilean mines, long-term mineral supply contracts and stronger domestic processing capacity.
If those pieces fall into place, the India-Chile partnership could become an important part of India’s strategy to secure the raw materials needed for its next phase of industrialisation.
The broader shift is clear: critical minerals are becoming as strategically important to future manufacturing as oil has been to the traditional industrial economy. India’s push to deepen ties with Chile shows that New Delhi is increasingly treating mineral security as a core component of economic, energy and technological security.
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