India Seals EU Trade Deal, Eyes Critical Minerals with Chile

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India’s Global Trade Ambitions Accelerate with Strategic FTAs

India is aggressively redefining its position on the global economic stage, underscored by a flurry of recent Free Trade Agreements (FTAs) and ongoing negotiations. Commerce and Industry Minister Piyush Goyal has confirmed the finalization of eight significant FTAs, encompassing 37 developed countries, with the most recent being a landmark deal with the European Union announced on January 27, 2026. This intensified trade diplomacy reflects India’s strategy to bolster economic growth, enhance market access, and secure vital resources amidst a shifting geopolitical landscape.

The EU Deal: A Cornerstone of Global Reach
The recently concluded EU-India FTA, described by officials as “the mother of all deals,” represents a monumental step. This agreement, negotiated over two decades, combines the economic might of India and the 27-nation EU bloc, representing approximately 2 billion people and 25% of global GDP. The pact offers unprecedented market access, with over 99% of Indian exports gaining preferential entry into the EU market. This includes substantial tariff reductions on goods spanning textiles, leather, gems, jewelry, pharmaceuticals, and machinery. The EU is India’s leading trading partner, with bilateral trade in goods and services reaching $136.54 billion in 2024-25. The FTA also features significant provisions for services, expanding opportunities for Indian professionals and potentially reducing reliance on other markets.
Securing Strategic Resources: Focus on Critical Minerals
Beyond the EU, India is actively pursuing pacts with nations rich in essential raw materials. Negotiations with Chile are reportedly nearing conclusion, with a strong emphasis on securing supplies of critical minerals such as lithium, copper, and cobalt – indispensable components for India’s burgeoning electronics, automotive, and solar energy sectors. Peru is also a key target, with trade agreement talks scheduled for January 2026, aiming to tap into its significant critical mineral reserves. This strategic focus on minerals is critical for India’s manufacturing ambitions and aims to diversify sourcing away from dominant global suppliers.
Expanding Horizons and Navigating Challenges
India’s trade outreach extends further, with active dialogues underway for FTAs with Canada, the Mercosur bloc (Argentina, Brazil, Paraguay, Uruguay), the Gulf Cooperation Council (GCC), and the Southern African Customs Union (SACU). These initiatives build upon recently finalized agreements with the United Kingdom (signed July 2025), Oman (signed December 2025), and the European Free Trade Association (EFTA) (implemented October 2025), the latter including a significant $100 billion investment pledge from EFTA countries. While these agreements promise to boost trade volumes and economic growth, analyses suggest a mixed impact. While sectors like IT and services have seen substantial gains, traditional industries like agriculture face competitive pressures, and some agreements have led to increased trade deficits. India’s average Most Favoured Nation (MFN) tariff remains high, reflecting a balance between liberalization and protection for domestic industries. Nevertheless, the nation’s GDP is projected to become the world’s fourth largest in 2026, a trajectory underpinned by this assertive trade policy.

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