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India-Chile FTA: A strategic push for Indian textiles in South America

12 Jun '25

6 min read

India-Chile FTA: A strategic push for Indian textiles in South America

Insights

India-Chile FTA offers a growth opportunity for Indian textile exports, currently forming ***** per cent of India's exports to Chile.
While India faces stiff competition, tariff reductions could boost its competitiveness, especially in technical textiles and fabric exports.
To capitalise, India must upgrade production, tackle logistical constraints, and strengthen transshipment routes.

India is already an observer in the Pacific Alliance, whose member countries include Chile, Colombia, Mexico, and Peru. This alignment underscores India’s broader geopolitical and trade outreach towards Latin America. While India currently lacks direct trade routes to Chile, efforts are underway to strengthen air connectivity and secure access to transshipment hubs, thereby addressing logistical barriers and enhancing trade efficiency.

Textiles and apparel remain one of India’s primary export categories to the Chilean market, despite India accounting for just * per cent of Chile’s overall imports. Indian textiles and apparel account for approximately ** per cent of India’s total exports to Chile, indicating the sector’s relative importance and potential for growth under a favourable CEPA framework.