India, Peru Will Resume Free Trade Agreement Negotiations: Commerce Secretary Sunil Barthwal

India, Peru Will Resume Free Trade Agreement Negotiations: Commerce Secretary Sunil Barthwal

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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 and investment, a top government official said on Friday.

“We have decided to proceed with the FTA negotiations. We would be working out the priority areas…Post September, we will start engaging,” Commerce Secretary Sunil Barthwal told reporters here.

He also said that Chile is also requesting a similar agreement.

“If the countries are interested in FTAs, we will also look into possibilities,” he said at the sidelines of CII’s India-LAC conclave.

The talks for an FTA were halted after a few rounds due to the breakout of the Covid-19 pandemic in 2020.

The main chapters of the trade agreement could include market access for goods, trade in services, movement of professionals, investments, dispute settlement, technical barriers to trade, trade remedies, rules of origin of goods, customs procedures and trade facilitation.

In an FTA, two countries significantly reduce or eliminate duties on most of the goods traded between them besides relaxing norms and rules to promote trade in services and increase bilateral investments.

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

The bilateral trade between the nations dipped to USD 3.11 billion in 2022-23 (exports stood at USD 866 million and imports USD 2.25 billion) from USD 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, fertilisers, crude oil and zinc.

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Latin America and the Caribbean (LAC) Region nations include Belize, Ecuador, Nicaragua, Brazil, El Salvador, Panama, Chile, Guatemala, Peru, Costa Rica, Guyana, and Suriname.

While speaking at the conclave, Barthwal also said that considering that imports from India constitute less than 2 per cent of LAC’s total imports, there is significant scope for expansion of India-LAC bilateral trade.

While efforts are underway to double the bilateral trade to USD 100 billion in the coming years, that will also call for a new approach to broadbase the trade exchanges, such as integrating with diversified global value chains in a re-globalised world, he added.

Further he also emphasised on the need for closer India-LAC cooperation in the area of energy transition.

Fresh thinking is called for in areas like renewals, battery manufacturing, energy storage technology, chemical industry impact, that are aligned with the net zero goal, he said.

He suggested a Joint Economic and Trade Cooperation (JETCO) model for cooperation between the two regions, besides calling for close India-LAC cooperation on issues in the forthcoming trade ministers level meeting of the WTO in Abu Dhabi next year. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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