Peru is poised to finalise a significant trade deal with India in 2025, marking a major step in its efforts to strengthen economic ties with the world’s two most populous nations. This potential agreement follows a series of negotiations that have been ongoing for several years and had been briefly paused due to Peru’s 2024 elections. According to Peruvian Minister of Foreign Trade and Tourism Ursula Leon, the government aims to resume negotiations with India, to complete the deal by next year.

India is an important trade partner for Peru, and a free trade agreement (FTA) with the South Asian giant would complement the trade relationship Peru already enjoys with China. Since 2009, Peru has had an FTA with China, one of the largest economies in the world. The addition of India to this list would create a powerful economic bloc for Peru, potentially opening up new markets for its exports, particularly in areas such as gold, minerals, and agricultural products.

Growth in Trade with India

Trade between Peru and India has seen a significant uptick in recent years, driven largely by the sale of gold from Peru to India. From January to September 2024, Peru’s exports to India surged by 77 per cent, reaching an impressive $3.5 billion. This sharp increase highlights the growing economic ties between the two countries, and an FTA could further boost this trade by reducing tariffs and increasing access to each other’s markets.

Peru, already the world’s third-largest copper producer, is seeking to expand its trade footprint globally, and establishing robust ties with both India and China would diversify its export destinations and reduce its dependence on a single trade partner.

Negotiations with Indonesia and China

In addition to India, Peru is also negotiating a free trade agreement with Indonesia, the world’s fourth-most populous nation. Indonesia, with a population of over 280 million people, represents a promising market for Peruvian goods, particularly copper, agricultural products, and processed food. Minister Leon expressed hope that negotiations with Indonesia would make substantial progress during the upcoming Asia-Pacific Economic Cooperation (APEC) forum in Lima, underscoring the importance of the deal for Peru’s regional trade strategy.

Moreover, Peru is updating its existing free trade agreement with China, which continues to be a cornerstone of its international trade policy. The updated deal will reflect the evolving economic landscape and ensure that both nations can continue to benefit from their strong trade relationship.

Strengthening Ties with Brazil

Peru is also working towards enhancing its economic relationship with Brazil, its largest trading partner in South America. While negotiations for a potential FTA have been delayed due to the pending anti-corruption protocol since 2016, Leon emphasized the importance of this clause in ensuring transparency and fairness in the agreement. As both countries share vast natural resources, especially in the mining sector, a strengthened economic partnership could further boost trade, particularly in the commodities market.

Looking Ahead to 2025

As Peru continues to push for these free trade agreements with India, Indonesia, and Brazil, the government is focused on building stronger international relations that will boost economic growth and secure new markets for its key exports. With a growing trade footprint in Asia and a clear focus on strengthening ties within South America, Peru’s economic future looks promising as it aligns itself with some of the world’s most dynamic economies.

Peru’s strategy to secure free trade agreements with both global giants and regional neighbours aligns with its broader goal of diversifying its economy and reducing its reliance on a narrow range of trade partners. As negotiations advance with India and Indonesia, the coming years could usher in a new era of trade for Peru, benefiting its farmers, miners, and manufacturers alike.