The Government of India has taken a significant leap in its global trade strategy by deepening economic linkages with Latin America. In recent months, India concluded two important rounds of trade negotiations — one with Peru, and another with Chile — signalling a shift from traditional markets toward fresh, mutually-beneficial partnerships.

Strong progress with Peru

During the 9th round of the Peru-India Trade Agreement negotiations held in Lima from 3-5 November 2025, the two countries made “substantive progress” across multiple chapters: trade in goods and services, rules of origin, technical barriers to trade, customs procedures, dispute settlement and critical minerals. Angel One+3Press Information Bureau+3The Economic Times+3 In the closing ceremony, Peru’s Minister of Foreign Trade & Tourism, Teresa Stella Mera Gómez reaffirmed Peru’s commitment to concluding the accord on time, underlining the complementarity between the two economies. Meanwhile India’s Ambassador to Peru, Vishvas Vidu Sapkal, highlighted India’s growth momentum and flagged opportunities spanning critical minerals, pharmaceuticals, automobiles, textiles and food-processing. Press Information Bureau+1 Both sides agreed to hold inter-sessional meetings to iron out remaining issues ahead of the next round proposed for New Delhi in January 2026. The Economic Times+1

Deepening engagement with Chile

Meanwhile, the 3rd round of negotiations on the Chile‑India Free Trade Agreement (via a Comprehensive Economic Partnership Agreement – CEPA) took place in Santiago from 27–30 October 2025. Discussions spanned trade in goods and services, investment promotion, rules of origin, intellectual property rights, TBT/SPS measures, economic cooperation and critical minerals. Press Information Bureau+2Angel One+2 Both sides reaffirmed their joint commitment to a time-bound conclusion of the CEPA negotiations with the aim of enhancing market access, strengthening supply-chain resilience and deepening economic integration. Firstpost+1

Why this matters – strategic and practical drivers
This renewed trade diplomacy reflects several strategic motives:

• For India: diversifying export markets beyond traditional partners, securing access to critical minerals (copper, lithium, rare earths) required for manufacturing, energy transition and supply-chain resilience. mint+1

• For Peru & Chile: gaining access to the large Indian market for goods, services, investment, and deepening ties to a growing economy that complements theirs.

• For both sides: building sustainable, long-term frameworks (not mere rapid deals) that cover goods, services, investment, and critical raw materials.

• For supply chain strategy: The focus on critical minerals aligns with global disruptions in supply chains, and India’s broader push to reduce reliance on a single source region. mint

Opportunities for sectors and stakeholders

• Indian exports: autos, textiles, pharmaceuticals, food-processing, engineering goods – these gain potential new markets in Latin America. Peru’s and Chile’s growing economies can open demand for Indian goods and services.

• Imports for India: critical minerals, metals, agricultural products, food commodities — especially from Peru (rich minerals) and Chile (mineral exports).

• Regional benefit: India’s engagement with Latin America opens South-South cooperation, deeper value chains, and possibly the establishment of Indian investments in Latin America and vice-versa.

• Tamil Nadu / Indian states: As noted in several recent analyses, Indian states with strong manufacturing, textiles, auto and pharma ecosystems stand to gain by engaging with Latin American partners. For example, Tamil Nadu’s industrial base could tap these emerging linkages. The Times of India

Challenges to watch

• Trade imbalance: In some cases, India’s imports from Peru and Chile exceed exports, leading to trade deficits in those bilateral flows. For example: India’s exports to Peru rose modestly while imports surged. mint

• Time-frames and conclusion: While progress has been made, the finalization of these agreements remains pending and subject to domestic ratification and detailed chapters.

• Implementation: Ensuring that the ambitious chapters (critical minerals, rules of origin, TBT/SPS) translate into action, and that supply-chain resilience is maintained.

• Geopolitical and logistical: Latin America is geographically distant from India; logistics, transport cost, tariff/regulatory frameworks and trade in services will require consistent effort.

Conclusion

India’s recent negotiation rounds with Peru and Chile mark a decisive step in its trade diplomacy. By engaging with Latin America — a region rich in resources, emerging demand and complementary economies — India is not merely seeking new markets, but forging strategic ties for goods, services, investment and critical raw materials. For Indian exporters, manufacturers, and states like Tamil Nadu, the move offers fresh opportunities. For Latin American partners, the engagement opens access to a vast and growing economy in India. The success of these efforts, however, will depend on how well both sides convert negotiation progress into implementable agreements, streamline logistics and regulatory frameworks, and manage the timing and balance of trade flows. In the end, what’s at stake is a new chapter of South-South cooperation — one where India and Latin America can both win by deepening economic integration, building resilient value chains and sharing growth.