South American nation Peru has emerged as a key supplier of gold to India, with trade volumes between the two nations witnessing a significant rise over the past decade. From 2014 to 2023, Peru exported a remarkable 357.23 tons of gold to India, making the South American nation a critical partner in fulfilling India’s substantial demand for the precious metal. As of 2023, India became the second-largest buyer of Peruvian gold, further cementing the trade ties between these two nations.
The Kundan Group, one of India’s leading gold importers, has been a significant beneficiary of this trade relationship. According to Ambassador of Peru to India Javier Manuel Paulinich Velarde between 2014 and 2023, Kundan Care Products and Kundan Refinery, among other companies associated with the group, imported 73.65 tons of gold from Peru. This volume represents a notable 20.6 percent of all the gold Peru sold to India during this period. In 2022 alone, Peru’s gold exports to India were valued at a staggering US$1.9 billion.
A Record-Breaking Year Ahead
Peru’s gold exports to India are on track to reach new heights in 2024. According to Ambassador Javier Manuel Paulinich, these exports are projected to soar by 36 percent from the previous year, reaching an unprecedented US$3 billion. In the first half of 2024 alone, India’s gold imports from Peru surged by 81 percent year-on-year, totaling US$1.47 billion.
This increase in gold trade is vital for both economies. For Peru, the revenue generated from gold exports plays a crucial role in supporting its mining industry, which in turn contributes significantly to the country’s GDP and provides employment opportunities.
For India, which fulfills a majority of its gold demand through imports, these shipments are essential to meet the high domestic demand for jewelry and investment.
The Case for Indian Investment in Peru’s Mining Sector
Despite being a leading buyer of Peruvian gold, India has yet to make substantial investments in Peru’s mining sector—a fact highlighted by Ambassador Velarde during the recently concluded India Gold Conference. In contrast, other countries like China, Canada, Mexico, and the United States have already established a strong presence in Peru’s mining industry. This gap in investment represents a significant opportunity for Indian companies.
Peru is rich in mineral resources, particularly gold, which is the primary mineral exported to India. In 2023, Peru’s total gold exports amounted to US$8.5 billion, with India accounting for US$2.2 billion of that figure. However, while India represents 26 percent of Peru’s gold export market, Peruvian gold only constitutes about 6.2 percent of India’s total gold imports.
Opportunities on the Horizon
Peru is actively seeking to attract Indian investments, particularly in its burgeoning mining sector. Currently, six major gold projects in Peru are in the investment stage, with a total investment value of nearly US$7 billion. In addition to these, there are 18 gold exploration projects underway, with a preliminary investment of US$220 million. These projects represent a significant opportunity for Indian companies to invest in the exploration and exploitation of gold deposits in Peru.
Mining has long been a cornerstone of Peru’s economy. Over the past decade, the sector has contributed more than 8 percent to the country’s GDP and accounted for over 65 percent of its total exports. Furthermore, from 2003 to 2022, Peru attracted more than US$17 billion in foreign direct investment (FDI) for manufacturing activities related to mining. The metal sector, which includes manufacturing linked to mining, represented 28 percent of this FDI, generating nearly 12,000 direct jobs.
As one of the top ten gold producers globally, Peru’s potential for further growth in this sector is immense. With gold deposits distributed across regions adjacent to the Andes mountains, there is a wealth of opportunities for exploration and development. Indian investors, who have so far been conspicuously absent in Peru’s mining landscape, are now being encouraged to capitalize on these opportunities.
A Strategic Partnership for the Future
As Peru continues to strengthen its trade ties with India, the South American nation is also keen to deepen its economic partnership by inviting Indian investments into its mining sector. The ongoing projects and the abundant gold reserves present a lucrative opportunity for Indian companies to expand their footprint in one of the world’s most resource-rich regions. With both countries poised to benefit from this collaboration, the future of India-Peru relations looks brighter than ever.
