India Seeks Critical Minerals Access in Chile and Peru FTA Talks

India is making strategic moves to secure its supply chains for critical minerals through Free Trade Agreement (FTA) negotiations with Chile and Peru. The negotiations, which are set to enter new rounds soon, may include dedicated chapters on critical minerals for the first time, signaling India's growing focus on resource security.

Upcoming Negotiations

An Indian trade delegation is scheduled to visit Chile on October 27 for the third round of FTA talks. Following this, the delegation will proceed to Peru on November 3 for the ninth round of discussions. These meetings underscore India's commitment to strengthening its trade ties with Latin American countries rich in mineral resources.

Critical Minerals in Focus

India's interest in these FTAs is largely driven by its need for stable supply chains of critical minerals. Currently, India imports:

• Gold from Peru
• Lithium, copper, and molybdenum from Chile

Through these negotiations, India aims to secure preferential exploration rights and stable pricing for these vital resources.

Copper Consumption and Future Demand

India's push for critical minerals is timely, considering its growing industrial needs. The country's copper consumption per capita is currently less than half that of developed economies. As India continues its industrialization journey, the demand for copper and other critical minerals is expected to rise significantly.

Strategic Diversification

The FTA negotiations are not just beneficial for India but also align with the interests of Chile and Peru. Both Latin American countries are looking to diversify their trade partners and reduce their dependence on China. This mutual interest creates a favorable environment for negotiations.

It's worth noting that China has been paying above-market premiums to secure long-term control over copper supplies, a strategy that has raised concerns among other global players.

Beyond Minerals: Expanding Trade Horizons

While critical minerals are a key focus, India's trade ambitions extend further. The country is also seeking duty concessions for its engineering goods exports to Latin American markets, aiming to boost its manufacturing sector's global reach.

Timeline and Expectations

• Peru has previously indicated plans to conclude a trade pact with India by 2025.
• India and Chile launched FTA negotiations in May to expand their existing Preferential Trade Agreement.

These upcoming rounds of negotiations are crucial steps towards realizing these goals and strengthening India's position in the global supply chain for critical minerals.

As these talks progress, they could potentially reshape the landscape of mineral trade between India and Latin America, with far-reaching implications for global supply chains and industrial development.