India and Peru on Thursday had another next round of negotiations for proposed free-trade agreement (FTA), aimed at boosting two-way commerce and investments. This is the fifth round of negotiations.
The previous round took place in the Lima, where the agenda for discussions included the market access for good, movement of professionals and procedures for customs.
Confirming that the fifth round of negotiations took place earlier today, sources said that the aim behind the special trade agreement is for liberalizing norms for trade in goods and services. Also, both countries are seeking to expand their trade basket and are looking at the agricultural products and important minerals including gold, zinc and now lithium.
The negotiations for this agreement had started in 2017 when officials from the Ministry of Commerce and Industry and Ministry of External affairs had visited the South American nation to identify the issues that needed to be addressed.
India and Peru are celebrating 56 years of diplomatic relations and Peru could be a gateway to the region for Indian investors who are keen on expanding their footprints.
Globally Peru is the sixth-largest producer of gold, second largest producer of silver. And is ranked third-largest producer of copper, tin, zinc, and lead.
According to sources, besides the table grapes- Red Globe variety, citrus fruits, avocado, grapes and quinoa are already in the Indian market.
The import of gold, silver, and copper from that country has gone up in the last few years because of the open trade between the two sides.
The trade negotiation between the two countries is taking place in an effort to either reduce or eliminate duties on most of the goods which are being traded presently. Also, both are keen to relax norms and rules to promote trade in services.
Lithium in Peru
Lithium has recently been discovered in the south of Peru located in a prehistoric lake covered with lava in the city of Puno. It is high-grade lithium and seven times higher than the deposits of Bolivia and Chile.
According to Debajit Palit, Director & Senior Fellow, Rural Energy, and Livelihoods Division, TERI, "A large reserves of high-grade lithium resources have reportedly been discovered in Southern Peru. The discovery of this strategic mineral in Peru will add to the existing reserves in Bolivia, Chile, and Argentina. India with its ambitious plan to promote Electric Vehicles (EV) and Solar PV will require large quantities of lithium for battery storage."
Given the positive trade relations between the two countries, Indian companies could be at an advantageous position to work with the Peruvian government in sourcing the strategic lithium, which will be key to the success of the Indian EV programme, Palit says.
"In addition, to the joint venture, which has recently been formed by three public sector undertakings to acquire reserves of strategic minerals to power India's move into EVs, the private sector should also take pro-active steps and start making lithium batteries in India by sourcing the raw material from countries such as Peru by entering into JVs with interested companies in those countries so that it benefits businesses of both countries and at the same time India can ensure raw material security of the strategic mineral resources to leapfrog towards EVs," he added.
Says Sandeep Wasnik, independent trade consultant for LAC Region, "This discovery of Hard Rock Lithium will be advantageous for India and soon the name "Lithium Triangle" will change once Peru joins the list. By 2021 Peru is expected to export close to $400 – 500 million Lithium to the world. However, there will be a price difference between the Lithium from Peru compared to `Lithium Triangle'.
"But this doesn't matter, this will be a good opportunity for India to get it as it will be useful in setting up Giganet Battery Factories in India and complete its mission for Green Energy. Peru also contains 120 million pounds of Uranium in the same region," Wasnik adds.