India and Chile are finding it difficult to close a key gap in negotiations for a Comprehensive Economic Partnership Agreement, with critical minerals emerging as one of the most sensitive issues in the talks, people familiar with the matter said. As the year-end deadline approaches, both sides are trying to preserve momentum, but the two economies are still not aligned on the balance between raw-material access, industrial cooperation and downstream value creation.
India is seeking preferential access to copper, lithium and other strategic inputs that are increasingly central to its energy transition, electronics manufacturing and broader industrial policy. Chile, one of the world's leading suppliers of copper and a major lithium producer, is open to deepening economic ties but wants the agreement to go beyond commodity trade. Santiago is pushing for supply-chain cooperation, technology partnerships and stronger support for value-added exports, reflecting its own effort to move up the mining value chain.
Critical Minerals Divide
The disagreement is not simply about tariffs. It reflects a deeper policy divergence over how resource-rich and resource-hungry economies should structure trade in an era of supply-chain insecurity and strategic competition. For India, access to reliable supplies of copper and lithium is increasingly tied to national priorities ranging from electric vehicles and battery storage to grid expansion and semiconductor-related manufacturing. The country has been looking for trade arrangements that can reduce import costs and improve supply certainty for inputs that are difficult to substitute.
Chile, however, is wary of becoming merely a supplier of raw materials. Its negotiators are understood to be seeking assurances that any pact will encourage investment, processing, logistics and industrial collaboration rather than lock in a simple extractive relationship. That position is consistent with Chile's broader economic strategy, which has increasingly emphasized local value addition, sustainable mining practices and resilience in global supply chains.
The challenge for both sides is that critical minerals are commercially important but politically sensitive. India wants a deal that can support domestic manufacturing and clean-energy ambitions. Chile wants a framework that strengthens its own industrial base and avoids overdependence on commodity exports. That makes the minerals chapter one of the most difficult parts of the CEPA discussions, even as other areas of the agreement may be more straightforward.
Deadline Pressure Builds
The talks are taking place under the shadow of a year-end target, which adds urgency but also raises the risk of a narrower or delayed outcome. Trade negotiations often move slowly when they involve strategic sectors, and the current round appears no different. Officials on both sides are trying to maintain the appearance of progress, but the unresolved minerals issue suggests that a final landing zone has yet to emerge.
For India, the stakes are broader than bilateral trade with Chile. New Delhi has been steadily pursuing trade and investment partnerships that can support its industrial ambitions without exposing it to excessive supply risk. Critical minerals have become a recurring theme in that effort, as governments around the world compete for access to the raw materials needed for the green transition. A deal with Chile would be valuable not only for the immediate commercial benefits, but also as a template for how India approaches mineral-rich partners elsewhere.
Chile, meanwhile, is navigating a global market in which demand for copper and lithium remains strong, but buyers are increasingly demanding secure, ethical and diversified supply chains. That gives Santiago leverage, but it also means the country is under pressure to use trade agreements to attract investment and technology rather than simply expand exports of unprocessed minerals.
Strategic Trade Test
The CEPA negotiations therefore amount to more than a conventional tariff discussion. They are a test of whether India and Chile can design a modern trade framework that reflects the realities of the energy transition and the strategic importance of mineral supply chains. If they can bridge the gap, the agreement could deepen commercial ties and set a precedent for cooperation in mining, processing and industrial development.
If they cannot, the talks may still produce incremental progress, but the most commercially significant provisions could be deferred. That would leave both sides with a partial outcome at a time when global competition for critical minerals is intensifying and governments are increasingly using trade policy as an industrial policy tool.
For now, the central question is whether India's demand for preferential access can be reconciled with Chile's insistence on a broader partnership. The answer will likely determine not only the pace of the CEPA talks, but also the character of the bilateral economic relationship for years to come.