India-Peru Trade Agreement: A Gateway to Expanding Trade Ties
India and Peru have a long history of trade relations dating back to the 16th century when Spanish traders arrived in India. However, in recent times, the trade between the two countries has been minimal. In 2019, the total trade between India and Peru stood at USD 1.4 billion, with India’s exports to Peru accounting for USD 912 million and imports from Peru amounting to USD 502 million. To enhance the trade relationship between the two countries, India and Peru signed a trade agreement in November 2020. In this article, we will take a closer look at the India-Peru trade agreement and its potential impact on trade ties.
Background:
The India-Peru trade agreement was signed on November 26, 2020, during the virtual meeting between the commerce ministers of the two countries. The agreement is aimed at enhancing trade and investment between India and Peru by reducing trade barriers and promoting mutual economic cooperation. The agreement covers trade in goods, services, and investment.
Key Provisions of the Agreement:
1. Goods trade: The agreement eliminates tariffs on 50% of the tariff lines for Peru`s exports to India and 268 tariff lines for India`s exports to Peru immediately upon signing the agreement. The remaining tariffs will be phased out in the coming years. This will provide easier access to the Indian and Peruvian markets for each other`s products.
2. Services trade: The agreement provides for a liberalized regime for trade in services between the two countries. It allows for the temporary entry of business persons for a wide range of services, including professional and technical services, research and development, and intra-corporate transfers.
3. Investment: The agreement provides for a favorable investment climate for investors from both countries. It includes provisions on fair and equitable treatment, protection against expropriation, and the free transfer of funds related to investments.
Impact of the Agreement:
The India-Peru trade agreement is expected to have a significant impact on the trade relationship between the two countries. It will open up new opportunities for businesses in both countries to explore each other`s markets. The agreement will benefit several sectors, including agriculture, pharmaceuticals, textiles, and machinery.
The agreement will also pave the way for increased cooperation between India and Peru in other areas such as education, culture, and tourism. It will promote people-to-people contact between the two countries, which will strengthen ties and enhance mutual understanding.
Conclusion:
The India-Peru trade agreement is a significant milestone in the bilateral relations between the two countries. It provides a framework for enhancing trade and investment between India and Peru, which will benefit businesses and consumers in both countries. The agreement is a testament to the growing economic ties between India and Latin America and the Caribbean region, which is a priority area for India`s foreign policy. It is a step towards India`s vision of a free, fair, and equitable world trading system.