India and Chile: Comprehensive Economic Partnership Agreement (CEPA)
India and Chile are set to embark on their first round of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) in New Delhi from May 26-30. This initiative aims to significantly upgrade their bilateral trade relationship.
Terms of Reference (ToR) Agreement
- The ToR for the CEPA was signed by Juan Angulo, ambassador of Chile in India, and Vimal Anand, joint secretary in India's Department of Commerce.
- The agreement aims to expand upon the existing preferential trade agreement (PTA) and includes sectors such as:
- Digital services
- Investment promotion and cooperation
- MSME (Micro, Small, and Medium Enterprises)
- Critical minerals
Trade Relationship and History
- In 2024, India had a $1.3 billion trade deficit with Chile, with exports worth $1.1 billion and imports totaling $2.4 billion.
- A Framework Agreement on Economic Cooperation was signed in January 2005, and a PTA followed in March 2006.
- The PTA was expanded in September 2016 and took effect on May 16, 2017.
- Further expansions were pursued with three negotiation rounds between 2019-2021.
Future Goals and Joint Study Group (JSG) Report
- The CEPA aims to deepen economic engagement and unlock the full potential of the trade relationship, boosting employment and facilitating investment and export promotion.
- The JSG report, finalized on April 30, 2024, outlines these objectives.
Recent Developments
- During Chilean President Gabriel Boric Font's visit to India (April 1-5), both leaders reaffirmed the importance of trade and commerce in their bilateral relationship.
- They welcomed the ToR signing and the start of CEPA negotiations to establish a balanced, ambitious, and comprehensive agreement for deeper economic integration.
