India and Peru Advance Trade Agreement Negotiations with Seventh Round of Talks

In a significant development aimed at bolstering economic ties between India and Peru, the seventh round of negotiations for the India-Peru Trade Agreement has commenced. The talks, which began on April 11 and are expected to extend over a period, represent a crucial step forward in enhancing bilateral trade relations and fostering mutual investments.

The Department of Commerce, underscoring India’s commitment to strengthening bilateral ties, has highlighted the potential economic growth opportunities that this trade agreement could unlock between the two nations. Led by Ambassador Javier Paulinich, the Peruvian delegation comprises approximately 17 negotiators, including high-ranking officials such as the Peruvian Ambassador to India and the Director of Asia, Oceania, and Africa trade from Peru, along with representatives from the Ministry of Commerce and Tourism. Their participation underscores the importance both nations attach to these negotiations.

These discussions mark a continuation of efforts that commenced in 2017, although they were temporarily interrupted by the COVID-19 pandemic. The resumption of talks in October 2023, through a virtual round, demonstrated the resilience and commitment of both sides to advancing their trade relations. Among the key issues under consideration is the challenge posed by duty concessions on gold, which constitutes a substantial portion, approximately 80%, of India’s imports from Peru. Addressing this challenge is crucial for fostering a more balanced and mutually beneficial trade relationship.

During the sixth round of negotiations held in February, nine working groups convened in-person meetings to delve into various aspects, including rules of origin, trade in goods, trade in services, customs procedures, movement of natural persons, trade facilitation, and dispute settlement. These discussions have laid the groundwork for the current round of talks and provide a framework for further progress. One of the central topics on the agenda is the diversification of imports, particularly of essential minerals and metals, which could contribute to a more robust and resilient trade relationship between India and Peru. Officials from both sides have expressed optimism that these negotiations will lead to a comprehensive agreement that addresses the interests and concerns of both nations.

It is anticipated that the India-Peru Trade Agreement could be finalized by the end of the year, paving the way for enhanced economic cooperation and expanded trade opportunities between the two countries. In the fiscal year 2023, gold accounted for $1.8 billion or 80% of India’s imports from Peru. India currently imposes a 15% import tax on gold, comprising a basic custom tax of 10% and an agriculture development tax of 5%.

Interestingly, India did not significantly reduce tariffs on gold in its recent trade deal with the EFTA bloc (Switzerland, Iceland, Norway, and Liechtenstein), highlighting the complexity and sensitivity of trade negotiations, particularly in the context of strategic commodities. As the negotiations progress, both India and Peru remain committed to fostering a robust and mutually beneficial trade relationship that capitalizes on their respective strengths and contributes to sustainable economic growth for both nations.