India is stepping up its trade engagement with South America, with Chile, Brazil and Argentina emerging as key markets in New Delhi's strategy to diversify exports and deepen economic partnerships, government sources told NDTV Profit.
Commerce Secretary Rajesh Agrawal is scheduled to visit the region from Aug. 24 to 28, during which he will chair joint trade committees with Brazil and Argentina and travel to Chile to advance negotiations on a proposed free trade agreement.
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Government sources told NDTV Profit that the India-Chile trade pact is at an advanced stage, with only a few outstanding issues requiring resolution. Both sides are keen to upgrade their existing Preferential Trade Agreement (PTA) into a broader Free Trade Agreement (FTA). Chile is seeking deeper access to the Indian market, while India is pushing for stronger engagement on critical minerals.
India and Chile implemented their PTA in 2006 and are now seeking to widen it into a comprehensive economic partnership covering areas such as digital services, investment, MSMEs and critical minerals. Four rounds of negotiations have been held, with the latest taking place in December 2025. Talks were subsequently paused following a change of government in Chile, but the new administration is keen to revive the agreement, sources told NDTV Profit.
With Brazil and Argentina, India is expected to discuss expanding its preferential trade deal arrangement with the MERCOSUR bloc. Government sources said that both sides are keen to engage MERCOSUR countries on an expanded PTA, while the terms of reference for launching negotiations are still being discussed. MERCOSUR bloc comprises Brazil, Argentina, Paraguay, Uruguay and Bolivia.
The longstanding India-Brazil sugar dispute at the World Trade Organization (WTO) is also likely to come up during bilateral discussions. Brazil has challenged India's sugar support and export measures, while India has defended its policies as consistent with its WTO rights and commitments. South America is becoming increasingly important for India as businesses seek new markets and supply-chain opportunities.
Bilateral trade reflects the growing potential. India-Argentina trade rose 25.5% to $5.96 billion in 2025-26, while India-Brazil trade increased 23.48% to $15 billion. Trade with Chile surged 66.45% to $6.25 billion during the same period. The upcoming visit is therefore expected to advance market-access negotiations, critical-mineral cooperation and wider trade integration with the region.
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