Government in FTA talks with Peru

India is in advanced level talks with Peru over a free trade agreement and is looking to facilitate greater trade with Chile

The government is in advanced talks with Peru over a proposed free trade agreement, Commerce Secretary Rita Teaotia said on Thursday.

Speaking at the Latin America and Caribbean Conclave organised by the Confederation of Indian Industry, she added an agreement facilitating more trade with Chile would soon be announced.

Current annual trade with Peru is $1.1 billion. Major exports involve automobiles and cotton. India imports minerals and precious metals like gold.

The secretary called for more trade in mining, information technology and allied services, and environmental technology. The Vice President of Costa Rica was present at the event, as were the ministers of foreign trade and industry from Nicaragua, Uruguay and Ecuador.

An estimated $45 bn is the total two-way trade India has with the Latin American and Caribbean region, up from $3.7 bn a decade earlier. This is five per cent of our total international trade. The government wishes to widen the scope of its preferential trade agreement (PTA) with the Mercosur bloc (Brazil, Argentina, Uruguay and Paraguay). India has partial admission in the regional bloc and about two-thirds of its total trade with the region is through this avenue. The PTA should be re-examined because it is “limited in many ways”, said Teaotia. It came into force from June 1, 2009.

TRADE VOLUME

• Current annual trade with Peru is $1.1 billion
• Major exports involve automobiles and cotton
• Major imports include minerals and precious metals like gold
• Call for more trade in mining, information technology and allied services, and environmental technology
• Invitation for investment in mining in India, where 100 per cent foreign direct investment is allowed via automatic approval
• $45 bn is the total two-way trade India has with the Latin American and Caribbean region
• The government wishes to widen the scope of its preferential trade agreement with the Mercosur bloc (Brazil, Argentina, Uruguay and Paraguay)
• About two-thirds of India's total trade with the region is through the PTA

The secretary said despite almost $15 bn of investment by Indian companies, South America is one of India's smallest trade areas.

Reliance and ONGC Videsh have sought exploration rights for oil and gas there, and are in the process of setting up refining facilities.

Teaotia asked Latin American companies to participate in the 'Make in India' initiative. Inviting investment in mining, she said India allows 100 per cent foreign direct investment in the sector, via the automatic approval route.

Pharmaceutical companies like Ranbaxy are also active in the region which is a hub for the industry.

The Vice President of Costa Rica along with ministers of foreign trade and industry from the countries of Nicaragua, Uruguay and Ecuador, were present at the event.