The burgeoning trade relationship between India and Peru reflects a strategic alliance marked by significant economic exchanges and collaborative potential. “In 2023, bilateral trade reached a notable US$3.12 billion, underscoring the depth of commercial ties. India’s exports to Peru, valued at US$865.91 million, primarily comprised automobiles, motorcycles, and pharmaceuticals, while Peru exported US$2.55 billion worth of goods, predominantly gold and copper, to India,” says Ambassador Javier Manuel Paulinich of the Republic of Peru in India.
In an exclusive interaction with FinancialExpress.com ahead of their National Day Celebrations next week, Ambassador Paulinich states “With the proposed Free Trade Agreement (FTA) set to be finalized by the end of 2024 or early 2025, both nations anticipate an enhanced trade volume and diversified economic interactions.”
Following are excerpts from the exclusive interaction:
What is the current bilateral trade between the two countries?
The bilateral trade volume between India and Peru reached US$3.12 billion in 2023. India exported goods worth US $865.91 million to Peru, while Peru’s total exports to India amounted to US$2.55 billion in the same year.
While Peru predominantly exports gold and copper, India reciprocates with automobiles, motorcycles, and pharmaceutical products. However, the implementation of an FTA promises to not only augment trade volumes but also diversify our trade basket, offering new avenues for collaboration and growth.
India imports gold from Peru.
Between 2014 and 2023, Peru exported 357.23 tons of gold to India. Out of this, 73.65 tons were destined for Kundan Care Products, Kundan Refinery, and other companies associated with the Kundan Group, one of India’s leading gold importers. This amount represents 20.6 percent of all the gold sold to India during this period. Notably, in 2022 alone, Peru exported gold worth US$1.9 billion to India.
The gold trade between Peru and India significantly impacts both countries’ economies. For Peru, the revenue from gold exports supports its mining industry, contributing to national GDP and providing employment. For India, gold imports are crucial for meeting the high domestic demand for jewellery and investment.
By when will the Trade Agreement be inked with India?
We concluded the seventh round of bilateral talks on April 11, 2024. The next round is scheduled for the second half of this year, with the aim of finalizing all negotiations by the year’s end or next year’s beginning. The proposed Free Trade Agreement seeks to create a favourable environment for increased commerce, trade, and investments by reducing barriers and facilitating smoother transactions between our countries. The potential impact of such an agreement on bilateral relations is substantial, as it can pave the way for expanded market access, diversified trade, and a more robust economic partnership.
Is there any talk of deepening defence and space cooperation?
Regarding the presence of defence authorities between both countries, Peru maintains a Defence and Military attaché office in New Delhi. The Indian Defence attaché office is run from Brazil, concurrently in Peru.
Peru and India have a marked interest in sharing knowledge in this field, which could materialize in cooperation activities on issues such as Disaster Risk Management, Prevention of Cyber Attacks, Health, among others.
Have you identified new sectors where the two countries can work together?
In addition to all the ties of friendship and cooperation already mentioned, Peru will soon have an instant payment system similar to UPI, Unified Payments Interface, a system that powers multiple bank accounts into a single mobile application. In early June, NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), signed an agreement with the Central Bank of Reserve of Peru to develop this technology.
“The support of the Reserve Bank of India (RBI) has been the cornerstone of this agreement. The BCRP (Central Reserve Bank of Peru) aims to promote inclusion, security and financial efficiency, and introduce new use cases in digital payments. Furthermore, we consider that this new infrastructure will play a fundamental role in promoting innovation and allowing the entry of new participants into the Peruvian ecosystem,” said Julio Velarde, President of the BCRP.
Ritesh Shukla, CEO of NIPL, mentioned: “Our partnership with the BCRP aims to strengthen Peru’s financial infrastructure to foster economic growth. Once in place, Peruvian citizens will gain access to unparalleled convenience, security and efficiency in financial transactions.”
This is NIPL’s second partnership with a central bank to implement Unified Payments Interface (UPI) in the international market. In May this year, NIPL signed an agreement with the Bank of Namibia (BoN) to develop an instant payment system like UPI in Africa.
We would like Peru to become the hub for Latin America for this innovative system.
