India explores FTA prospects with Peru, shifts focus to strategic cooperation in trade pacts

Barthwal emphasised that India is adopting a new approach to FTAs, with an emphasis on security FTAs

India and South American country Peru have decided to resume negotiations for a proposed free trade agreement (FTA) with an aim to promote two-way commerce, Commerce Secretary Sunil Barthwal said at a press briefing on August 14.

"Latin American Countries (LAC) have shown a keen interest in forming new FTAs with India in discussions that happened over the India-LAC Conclave held in New Delhi recently," the secretary added.

The country may engage with Peru as early as September to begin negotiations in this matter.

Peru ranks third among export destinations for India in the Latin America and Caribbean (LAC) region.

The bilateral trade between the nations dipped to $3.11 billion in 2022-23 (exports stood at $866 million and imports $2.25 billion) from $3.6 billion in 2021-22.

Among the top-10 commodities that India exports to Peru are motor vehicles, cars, products of iron and steel, cotton yarn and fabrics. While the imports include bulk minerals and ores, gold, fertilizers, crude oil and zinc.

As per the official, the government is taking a fresh approach to finalizing FTAs while looking at security from other countries in terms of strategic supplies rather than only focusing on trade.

"Depending on capacity and gains on trade scenario we will be taking up these FTAs. We are looking from point of view of energy transactions, we are looking at countries for securing critical mineral supplies helping us in energy transition like battery making. Strategic consideration along with trade also part of our choice of countries for FTAs," Barthwal added.

Chile is another country from the LAC region which has approached India with an interest on forming an FTA along with Bangladesh and Sri Lanka.

Commerce and Industry Minister Piyush Goyal had too emphasized upon the need for enhanced collaboration and trust-building between India and the Latin American & Caribbean (LAC) region during the closing ceremony of India- LAC conclave on August 4.

"We can foster deeper cooperation between India and LAC region by boosting trade flows, leveraging bilateral partnership, with healthcare and pharmaceuticals cooperation as well as addressing global issues," he had said.