Read the Answers to Your Questions Regarding the Peru India Free Trade Agreement
Peru a country of Latin America is one of the growing economies and it is because of the free trade agreement which allows Peru. This Peru India free trade agreement was established so that Peru can freely import and export goods easily and thus expand its economy.
Peru has established Peru India trade agreement to negotiate the trade facilities with India as India is the powerhouse amongst the world growing economic countries.
Understanding Peruvian Economy
Peru is growing at a faster rate and thus it is ranked as the 7th largest economies in Latin America. Peru’s GDP (Gross Domestic Product) is USD 190 billion as per 2017, out of which a quarter of GDP came from exports. The exports contributed about USD 44 billion due to Peru India free trade agreement.
The billion-dollar business of exports comes from exporting items such as:
- Mining, contributing to 37% of the total export income
- Copper and gold together summing up 22% and 16% Peruvian exports
Peru also imports quality rich goods which amounts to a total of USD 40 in the year 2017. The top import items of Peruvian economy are:
- Broadcasting equipment
- Vehicles such as delivery trucks and cars
- Chemical products like pharmaceutical and pesticide items.
Peru India Free Trade Agreement
Peru has a free trade agreement with many countries such as Japan, United States, Europe, China, South Korea, Singapore so that Peru can easily import and export without any hassle. Despite having a free trade agreement and a good commercial jurisdiction in Peru, trading in Peru is not as easy as it sounds, as the cost for obtaining license, and logistics are quite high along with complicated processes.
Before getting into Peru India Free trade Agreement, the export value of Peru goods to India is worth around USD 1.5 million and Peru has exported approximately USD 15.5 billion good items to Asian market in 2017 while in 2016, it exported USD 10.5 billion. This data tells us the rising trade between Peru and Asian market, and thus to establish and grow its economy, Peru has signed a free trade agreement with India to reap maximum benefits.
Future aspects of Peru India Free Trade Agreement
The rising trade of export goods between Peru and India shows an enormous growth in Peruvian’s economy. With the effect of Peru India Free Trade Agreement, the worth of exported items can rise up to USD 2 billion.
For Peru to increase its income through exported goods, Peru must also provide benefits to Indian export companies who are into exporting of machinery, vehicles, pharma products and electrical equipment to Peru.
With the rise of imported and exported goods from Peru to India despite the current import duties, the two countries; Peru and India have become strong business partners to become strong economic countries in the world. With increasing, trade between these two regions, Peru India free trade agreement was brought into picture so that business opportunities can increase. Every year, the value of imported goods is increasing and thus their economies will also increase.
Present Scenario between Peru and India trade system
Currently, the import duty possessed by India is around 7.5% on Peruvian pharma products while Peru doesn’t have any kind of import duty on Indian bulk pharmaceuticals.
Otherwise, the import duty on Indian products by Peru is about 6% while the vice versa is about 10% on Peruvian imported goods.
Vehicles and motorcycles are largely imported to Peru which accounts for 4.5% of total imports, thereby becoming the second largest imported item. The largest category of India’s exported items to Peru are vehicles such as cars, motorcycles and other related transported goods. This data is collected from the fact that the total worth of the imported vehicles to Peru accounted to a quarter of billion dollar.
Peru exports Gold to India accounting for a total of 6% worth USD 24 billion. Peru exports Gold to other countries in huge quantities thus, gold is the second largest exported single item amongst the Peruvian goods. It has been observed that the trade between Peru and India related to Gold is subsequently increasing from USD 106 million in 2012 to USD 270 million in the year 2014.
Apart from gold, other items such as copper, calcium and phosphate are exported to India in large quantities. India’s demand for mining is consequently increasing thus India is investing in Peruvian mines for mineral products and metals from Peru. The list of companies that are investing in Peru mines are:
- Tech Mahindra
- Zuari Agro Chemicals
The increasing trade demands between Peru and India provides excellent business opportunities to those interested in import and export business between these two regions. Many products have been imported and exported; large quantities such as gold, vehicles, pharma products continue to be on top three good items.