Context:
The sixth session of discussions between India and Peru for a free Trade Agreement took place in Lima, Peru.
About India-Peru Trade Agreement Negotiations
- The first Negotiations for a trade agreement between India and Peru commenced in 2017. Five rounds of discussions were conducted until August 2019.
- The negotiation process was disrupted due to the global COVID-19 pandemic.
Objectives Of India-Peru Trade Agreement
- To boost bilateral trade and investment.
- To promote trade in services
- To enhance the economic and commercial ties between India and Peru by reducing trade barriers and promoting cooperation.
Impact of India-Peru Trade Agreement
Potential Positive Impacts:
For India
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Potential Negative Impacts:
For India
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- Increased exports: Lower tariffs on Indian goods could boost exports like pharmaceuticals and vehicles.
- Access to raw materials: Easier access to Peruvian resources like copper and gold could cut production costs.
- Attracting investments: Friendlier trade could attract Peruvian investors, leading to tech transfer and infrastructure growth.
- Job Creation: More trade and investment could mean more jobs across sectors in India.
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- Competition from imports: Indian industries might struggle against cheaper Peruvian goods.
- Job losses: Automation and competition could lead to job cuts in some sectors.
- Environmental concerns: Fast trade growth might harm the environment without proper rules.
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India-Peru Relations
- India and Peru initiated diplomatic relations in March 1963.
- India and Peru have historically maintained warm and amicable relations.
- They both have signed Many bilateral agreements such as the Customs Cooperation Agreement, Cooperation in New and Renewable Energy, and Defence Cooperation Agreement.
Commercial Relations Between India and Peru
- Trade between India and Peru is on the rise.
- In the financial year 2022-23, the total trade between the two countries was valued at US$3291.64 million.
- The trade between India and Peru has gone up a lot, starting from US$ 66 million in 2003 to about US$ 3.68 billion in 2023.
- India’s main exports to Peru: Automobiles, polyester, motorcycles and cotton yarns, pharmaceuticals, iron and plastic products, steel products, rubber, pipes for the oil and gas industry, and tyres.
- Imports from Peru to India: Gold, copper, synthetic filaments, calcium phosphates, fresh grapes, fish flour, and other items.
About Peru
- Peru is a nation in South America.
- Capital : Lima
- Bordering Nations; North by Ecuador and Colombia, East by Brazil, Southeast by Bolivia, South by Chile, and South and West by Pacific Ocean
- Major Producer: Lithium, lead, zinc, gold, copper, and silver.
- Argentina, Chile, and Bolivia together make the Lithium triangle.
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Also Read: Free Trade Agreements (FTAs) And Beyond
News Source: PIB+Livemint
16 Feb 2024
