The NDA government has decided to start negotiations for a free-trade agreement (FTA) with Peru to not only boost bilateral relations but also make that country a gateway to expand India’s trade and investment ties, especially in the defence sector with the Latin American region.
According to sources, ?the government has decided to start FTA talks with Peru also keeping in mind support from some of the countries of the region during the recent WTO talks on trade facilitation (where India’s stand on linking food security issues to trade facilitation had the open support of Cuba, Venezuela and Bolivia).?
Indian exports to Peru are expected to cross the $1 billion mark in 2014, yet India is at a disadvantage vis-a-vis exports from Peru’s FTA partners.
State-owned Hindustan Aeronautics is in contact with potential customers for its Advance Light Helicopter ‘Dhruv’ in the region and business prospects are being pursued in countries such as Bolivia, Peru, Colombia, Brazil, etc. Several countries in the region have also approached Indian companies, especially MSMEs, in the defence and aerospace sectors to set up manufacturing bases in their countries, and are offering tax incentives.
Edgar Vasquez, vice-minister of foreign trade, Peru, who visited New Delhi recently, said: ?Peru could be used by Indian investors to set up base in Latin America and also Peru can use India as its base in South countries (South Asian countries).?
Though dates are being worked out for formal negotiations next year, sources have indicated they could possibly coincide with the visit of Peruvian President Ollanta Humala next year.
The Peruvian government has invited Indian businessmen to invest in the country for construction of roads, highways, ports, airports, telecommunications and energy and take advantage of its tourism spots to boost bilateral tourism ties. The country is also keen on tapping India for space technology.
While Peru Big Cola (AJE group), a beverages manufacturer, had entered India in 2010, Peru is looking to increase opportunities to significantly expand business stimulating investments and joint ventures in mining, tourism, IT (software), jewellery, agribusiness, etc. Peru has signed 40 FTAs across the world, including with China and European Union.