India and Peru are trying to fast-track launch of negotiations on a free trade agreement (FTA) with both sides examining how ambitious the pact should be.
“In a recent meeting in Lima, the two sides discussed the possible areas the pact could cover and decided to finalise the joint study group (JSG) report soon,” a government official told BusinessLine .
An FTA with Peru, together with a similar agreement with Chile (which will be launched as soon as the Union Cabinet gives its nod), will give Indian exporters a stronger foothold in South America and help the country diversify beyond the traditional markets of the EU and the US.
“India and Peru believe that an FTA could increase bilateral trade several-fold from the present level of $1.4 billion annually,” the official said.
India’s major exports to Peru include iron and steel laminated products, rubber tyres, three wheelers /motor cycles & parts, pharmaceuticals, organic and inorganic chemicals, yarns.
India’s main items of imports from Peru are metalifers ores & metal scraps, gold, fertilisers, crude, silver, non-ferrous metals, inorganic chemicals, leather and dye.
“There exists a lot of scope for India and Peru to collaborate in the hydrocarbon and minerals sectors and also in financial services,” the official said.
Services includedNew Delhi wants the proposed FTA to also cover services and not be just limited to goods. “While language is a problem in the Latin American market, but we are confident that there would be demand for India’s cheap and high quality services in various areas including IT and financial services,” the official said.
The exact contours of the FTA would be clear only after the JSG finalises its report.