South America emerges as India’s next trade bet

New Delhi: India is ramping up its focus on South America as part of a trade diversification strategy, according to an official source. The Commerce Secretary Rajesh Agrawal's visit to Chile, Argentina, and Brazil from August 24 to 28 will mark the beginning of these efforts. The secretary will hold joint trade meetings in Argentina and Brazil and assess the progress of a proposed Comprehensive Trade Agreement with Chile.

The talks between India and Chile are nearing completion, with only a few issues remaining to be resolved. These issues, which may be discussed during the secretary's visit, include market access and critical minerals. India and Chile have a Preferential Trade Agreement (PTA) since 2006, and they are currently negotiating to expand its scope to a Comprehensive Economic Partnership Agreement (CEPA).

The CEPA would cover a wider range of sectors, such as digital services, investment promotion and cooperation, MSMEs, and critical minerals.

Chile is India's fifth-largest trading partner in the Latin American and Caribbean (LAC) region. However, no formal negotiations have taken place since the last round held in December 2025 following a change of government in Chile, led by Jose Antonio Kast. Both countries are keen on finding solutions to the pending issues and expanding their trade ties.

Argentina and Brazil are also significant markets for India. The India-Mercosur Preferential Trade Agreement (PTA) came into effect on June 1, 2009, with a limited scope covering 450 tariff lines. Both sides are looking to expand the scope of this pact. The finalization of terms of reference for starting negotiations between India and Mercosur is under discussion and is expected to be addressed during the secretary's visit.

Additionally, the India-Brazil bilateral trade increased by 23.48 percent to USD 15 billion in 2025-26, while India-Chile bilateral trade rose by 66.45 percent to USD 6.25 billion during the same period. The sugar trade dispute at the World Trade Organization (WTO) may also be discussed during the India-Brazil deliberations, as Brazil alleged that India's sugar support policies and export subsidies were inconsistent with WTO provisions.