India and Peru are in the final stages of negotiating a Free Trade Agreement (FTA), expected by late 2025 or early 2026. The deal aims to lower tariffs, ease non-tariff barriers, and expand investments across mining, agriculture, pharmaceuticals, IT, and clean energy. Bilateral trade has doubled in five years, reaching USD 4.03 billion in 2023–24, though India runs a trade deficit due to high gold imports from Peru.
India and Peru are advancing discussions on a Free Trade Agreement (FTA), which is expected to be concluded by the end of 2025 or early 2026. The agreement is aimed at lowering tariffs, easing non-tariff barriers, and boosting investment flows in strategic areas such as mining, agriculture, pharmaceuticals, and technology.
Peru’s exports to India mainly comprise gold, copper, zinc, silver, molybdenum, and agro-products including blueberries, avocados, quinoa, asparagus, and grapes. On the other hand, India’s exports to Peru are led by pharmaceuticals, automobiles and auto-parts, IT and software solutions, and industrial machinery.
A key issue under negotiation is tariff concessions on gold imports, which account for nearly 80% of India’s total imports from Peru. Even a minor tariff reduction could substantially raise gold imports, impacting India’s domestic market. Furthermore, non-tariff barriers—particularly in sanitary and phytosanitary standards (SPS) and technical barriers to trade (TBT)—remain a challenge for Indian exporters. Addressing these, alongside logistical gaps such as limited direct shipping routes and restrictive work permit regulations, will be critical for maximizing the potential of the FTA.
India–Peru bilateral trade
Peru is India’s 6th largest export partner and 2nd largest import partner in the Latin America and Caribbean (LAC) region. Conversely, India is Peru’s 11th largest import source and 3rd largest export destination globally.
Bilateral trade has expanded significantly, growing from US$ 2.34 billion in 2019–20 to US$ 4.03 billion in 2023–24, marking a compound annual growth rate (CAGR) of 11.52%. Indian exports to Peru increased from US$ 764 million (2019–20) to US$ 920 million (2023–24), growing at a CAGR of 3.8%. Indian Imports from Peru, almost doubled from US$ 1.58 billion (2019–20) to US$ 3.11 billion (2023–24), growing at a CAGR of 14.6%. As imports from Peru outpaced exports, India’s trade deficit widened from US$ 1.81 billion in 2021–22 to US$ 2.19 billion in 2023–24.
Top Indian Exports to Peru (2023–24) includes machinery and mechanical appliances, cotton, pharmaceutical products, vehicles (other than rail/tram), electrical machinery, other exports included man-made staple fibres, organic chemicals, rubber, copper articles, and tanning extracts. Whereas top Indian Imports from Peru (2023–24) includes gems and jewellery, ores, slag and ash, Iron and steel, mineral fuels and oils, salt, sulphur, stone, lime and cement, other imports included aluminium, inorganic chemicals, tanning extracts, edible fruits, and man-made fibres.
India ranks as the 98th largest investor in Peru, with cumulative FDI outflows of US$ 28 million (April 2000 – February 2025). Indian firms are active in mining, pharmaceuticals, automobiles, and IT. Key players include Sun Pharma, Bajaj Auto, TVS, Hero Motors, Tech Mahindra, TCS, and Infosys. On the other hand, Peru’s cumulative FDI into India reached US$ 3.77 billion (April 2000 – December 2024). These investments are concentrated in mining machinery, beverages, and services. Notable Peruvian firms in India include AJE India Pvt. Ltd (soft beverages), Resemen S.A.C (mining machinery), Opermin, and AAC Mining Executors Ltd.
Emerging areas of collaboration
Renewable Energy
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Peru’s energy mix in 2022 was dominated by natural gas (54%) and crude oil (20%), highlighting scope for renewables.
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Under its NDC, Peru has pledged to cut emissions by 40% by 2030, capping them at 179 MtCO2e.
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India and Peru can collaborate on hydropower (Atlantic basin potential), geothermal projects (southern volcanic regions), and tidal energy technologies.
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Joint research under platforms like B-EPICC can strengthen resilience against climate impacts.
Healthcare & pharmaceuticals
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70% of Peruvians in need of healthcare did not access it in 2022 due to long wait times, cost, and distance.
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With major Indian pharma companies already present, joint ventures in medical equipment manufacturing, telemedicine, and digital health services can bridge gaps.
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Both countries can sign MoUs to share best practices, build capacity, and expand manpower training.
Information technology & digital capacity
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Peru ranks 75th in the Global Innovation Index (GII 2024), while India ranks 39th.
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The UPI adoption agreement between NPCI International and Peru’s Central Bank marks a milestone in fintech cooperation.
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Collaboration opportunities includes in cybersecurity, 5G rollout in rural Peru, e-commerce for SMEs, AI skilling, and digital public infrastructure (Aadhaar, DigiLocker, education platforms).
Agriculture
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Peru’s agriculture accounts for 6% of GDP, with exports supported by a favorable climate and technology.
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India exported US$ 12.36 mn worth of agriculture products to Peru in 2023–24, led by spices, cereals, oilseeds, coffee, and fruits/vegetables.
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Joint opportunities include climate-smart agriculture, agritech solutions, sanitary certifications, and long-term farm-to-food security partnerships.
Infrastructure development
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Peru faces an infrastructure gap of US$ 110 bn across transport, sanitation, healthcare, telecom, and education.
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India and Peru can expand cooperation through PPPs, smart cities projects, port development, and direct flight connectivity to reduce logistics costs and boost trade.
Defence & space
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India’s defence exports reached US$ 2.76 bn in 2024–25.
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Peruvian personnel already train in Indian defence institutes; cooperation can expand to joint military exercises, digital defence platforms, and private sector participation.
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Space cooperation dates back to a 1998 MoU between ISRO and CONIDA, which can be scaled up for satellite tech, weather monitoring, and low-cost launches.
Tourism
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Tourism contributed 2.5% of Peru’s GDP in 2023, with international arrivals rising to 3.5 million in 2024.
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Peru is positioning itself as a hub for Bollywood productions, Indian weddings, and cultural tourism.
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Collaboration areas include infrastructure investments (USD 600+ mn in Chimbote city), roadshows and expos, and a bilateral MoU on sustainable tourism.
Conclusion
The India–Peru economic relationship has witnessed rapid growth, with bilateral trade doubling in five years and FTA negotiations on track for 2025–26. While challenges remain in tariffs, non-tariff barriers, logistics, and mobility, the complementarities in mining, clean energy, agriculture, healthcare, IT, defence, and tourism offer vast untapped potential. For states like Tamil Nadu, Peru’s resource wealth and growing markets can unlock new opportunities in electronics, batteries, and manufacturing, positioning the FTA as a landmark agreement for the next phase of Indo–Latin American cooperation.
FAQs
1. What is the India–Peru Free Trade Agreement (FTA) about?
The India–Peru FTA is a trade deal under negotiation, expected by late 2025 or early 2026, aimed at lowering tariffs, easing non-tariff barriers, and boosting investments in sectors like mining, agriculture, pharmaceuticals, IT, and clean energy.
2. How much trade do India and Peru currently have?
Bilateral trade reached US$ 4.03 billion in 2023–24, doubling over five years. India exports pharmaceuticals, automobiles, IT services, and machinery, while Peru exports gold, copper, agro-products, and minerals.
3. What are the main challenges in India–Peru trade?
Key issues include tariff concessions on gold, non-tariff barriers like sanitary and phytosanitary (SPS) standards, technical barriers to trade (TBT), limited shipping routes, and restrictive work permit regulations for Indian businesses.
4. Which sectors offer new opportunities under the FTA?
Emerging areas of collaboration include renewable energy, healthcare and pharmaceuticals, IT and digital solutions, agriculture, infrastructure development, defence, space, and tourism. These sectors can benefit from joint ventures, technology sharing, and capacity building.
5. How can Indian companies benefit from the FTA with Peru?
Indian firms can expand exports, invest in Peru’s mining, renewable energy, IT, and pharma sectors, leverage joint ventures in agriculture and healthcare, and access Peru’s growing markets, especially for electronics, batteries, and manufacturing opportunities.
