Technical talks on India-Peru Free Trade Agreement start
Financial Express - 11 August 2023
Technical talks on India-Peru Free Trade Agreement start
By Mukesh Jagota
Technical teams of India and Peru have started negotiations on the modalities and scope of the proposed Free Trade Agreement (FTA) which will lay down the basis of negotiations.
India and Peru had first started negotiating an FTA in 2017 and five rounds of talks had been held till August 2019 before COVID pandemic disrupted the process.
“We are going to talk again about that (the modalities). Due to the pandemic many things changed so we want to replan additional modalities and our technical teams will hold that conversation,” Vice Foreign Trade Minister of Peru Teresa Stella Mera Gomez said in a recent interview to FE.
She said the technical teams would also be defining the timeframe, and formal negotiations would start in the next few months.
“We would like to have a very pragmatic process. The proposed agreement will at least deal with trade in goods and services. If areas like investments are to be made part of it will be decided by the technical teams,” she said.
India-Peru trade in FY 23 was $ 3 billion. While India’s imports from Peru were $ 2.2 billion, exports stood at $ 865 million.
India’s main exports to Peru include automobiles, motorcycles and three-wheelers, polyester and cotton yarns, pharmaceuticals, iron and steel products, plastic products, and tyres. Main imports from Peru are gold, copper, synthetic filaments, phosphates of calcium, fresh grapes, fish flour and blueberries.
The minister said Peru’s main interests are in exporting agricultural products like fruits and vegetables like avocados, fresh grapes, blueberries and natural resources like gold, copper and calcium phosphates. Most of the blueberries that are sold in India are sourced from Peru.
“In manufactured products also we are interested in finding space in India.”
She said Peru has trade agreements with all major economies like the US, EU, China and Japan and is also a member of the Comprehensive and Progressive agreement for Trans-Pacific Partnership.
“We are not competing in the same product. Our economies are complementary, that is very helpful in the negotiation process,” the minister said.
Peru is also seeking Indian investments.
“We are in the centre of South America and we are developing a new port at Chancy (80 km north of Lima). It is going to be ready next year and would be able to take in bigger ships and reduce the time to connect with Asian countries. That could be an opportunity for Indian business to manufacture products there,” Gomez said.
“We want Mahindra, Tata and all the Indian brands doing business in Peru. Indian automobiles, two-wheelers, and three-wheelers are very well known there, Bajaj is there, TVS is there. We need to have your products (manufactured) there in order to compete with the rest of the countries we are importing from.”
Peru taxes imports of auto at 18%.
She said foreign companies in Peru face no discrimination tax incentives for investments are decided on a case to case basis. Peru also provides free trade zones where Indian companies can manufacture.
Some Peruvian companies also have a presence in India AJE Peru has an Indian subsidiary that makes soft beverages. A major Peruvian company, Resemen S.A.C., which specialises in mining machinery, has opened a subsidiary in India by the name of Reliant Drilling Ltd. Several other mining services companies of Peru have set up operations in India such as Opermin and AAC Mining Executors. Lubricants major Vistony has set up a plant in India.
