India eyes critical minerals, bigger markets in South America trade push

New Delhi: India is enhancing its focus on South America as part of its trade diversification strategy, particularly Chile, Argentina, and Brazil, which present significant export opportunities and are expected to strengthen trade ties during Commerce Secretary Rajesh Agrawal's visit from August 24 to 28, an official said.

The secretary will chair joint trade meetings in Argentina and Brazil and take stock of the progress of the proposed comprehensive trade agreement with Chile.

The official said trade pact talks between New Delhi and Santiago are at an advanced stage, and only a few issues need to be resolved.


Also Read: US-India trade deal nearly final, Rubio to visit India in October: Sergio Gor

The issues likely to figure in the Chile meeting include market access and critical minerals.

India and Chile implemented a Preferential Trade Agreement (PTA) in 2006 and are now negotiating to widen its scope for a CEPA (Comprehensive Economic Partnership Agreement).

CEPA aims to build upon the existing PTA between the two nations and seeks to encompass a broader range of sectors, including digital services, investment promotion and cooperation, MSMEs (micro, small and medium enterprises), and critical minerals.

Chile is India's fifth-largest trading partner in the LAC (Latin American countries) region. The two countries have held four rounds of negotiations, with the last round held here in December 2025.

Since the last engagement, there has been a change of government in Chile following the December 2025 elections. A conservative government led by Jose Antonio Kast, who won the 2025 presidential election, assumed office on March 11, 2026. Since then, no formal negotiation has taken place.

"The new government in Chile is keen on the agreement. Both sides are looking to find solutions to the pending issues," the official said.

With Argentina and Brazil, a proposal to expand the preferential trade agreement between India and the South American nation bloc Mercosur may figure in the meetings during the secretary's visit.

Ways to further boost trade ties will be discussed with Argentina and Brazil, the official noted.

Mercosur is a Latin American trade bloc comprising Brazil, Argentina, Uruguay, and Paraguay.

The India-Mercosur PTA came into effect on June 1, 2009. This PTA has limited coverage and contains only 450 tariff lines or products. Both sides are looking at expanding the scope of this pact.

The finalisation of terms of reference for starting negotiations between India and Mercosur is under discussion, and it will come up during the meetings, the official said.

Argentina and Brazil are big markets, and they have a decent population of Indian diaspora. According to experts, these countries are also looking at reducing dependence on China.

The sugar trade dispute at the World Trade Organisation (WTO) may also come up in the India-Brazil deliberations.

The dispute is related to India's domestic support to sugarcane producers and alleged export subsidies for sugar.

Brazil alleged that the measures are inconsistent with provisions of the WTO's Agreement on Agriculture and Agreement on Subsidies and Countervailing Measures (ASCM).

Also Read: India eases rules for rupee export payments, seeks to widen trade settlement

India has contested these claims before the WTO panel and maintained that its sugar support policies and export-related schemes are in accordance with its WTO commitments and rights under these agreements.

BILATERAL TRADE:

The India-Argentina bilateral trade in 2025-26 rose 25.5 per cent to USD 5.96 billion (India's exports USD 1.01 billion and imports USD 4.95 billion) from USD 4.75 billion.

The two-way trade between India and Brazil rose 23.48 per cent to USD 15 billion (India's exports USD 7 billion and imports USD 8 billion) from USD 12.2 billion.

The India-Chile bilateral trade in 2025-26 jumped 66.45 per cent to USD 6.25 billion (India's exports USD 1.22 billion and imports USD 5.03 billion) from USD 3.75 billion.