It’s the ‘golden’ year for India-Peru relations. Literally. India started exporting gold from Peru only a few months ago, giving a sharp spike to bilateral trade which has now shot up to over $1 billion. And an Indian business chamber has been launched in the Peruvian capital that will act as a catalyst for accelerating business relations between India and the resurgent Latin American region.
Peru, the land of the Incas, is rapidly emerging as an important hub of the globally-bound India Inc, as more Indian companies scour opportunities in diverse sectors ranging from minerals and mining to textile, automobiles, machines and pharmaceuticals.
This burgeoning business synergy was telescoped in the launch of the Indian Chambers of Commerce (INCHAM) by India’s Vice-President Hamid Ansari on a pleasantly cold morning in the Peruvian capital October 29. Top business leaders of Peru were present at the launch, signifying a vote of confidence in the India growth story amid the festering global slowdown.
Ansari’s visit to Lima marks the golden jubilee of the establishment of diplomatic relations between India and Peru.
The INCHAM promises to fill what has so far been a vacuum in India-Peru commercial and economic relations, said Ansari. INCHAM seeks to act as an incubator and accelerator of two-way trade and investment between India and Peru and other countries of Latin America. The official website of INCHAM (http://incham.pe/drupal/) in Spanish seeks to bridge the knowledge and information gap between businesses of India and the region by showcasing emerging opportunities and providing information and advisory services to entrepreneurs itching to take chances and thrive in this diplomatic tango between India and Peru and the larger Latin American and Caribbean region.
The growing economic relations between India and Peru shows that a blend of government encouragement and entrepreneurial zeal can help transform relations between the two countries. Bilateral trade has shot up seven times in the last two years, and is currently estimated to be over $1 billion. The export of gold by India to Peru to the tune of around $200 million has contributed signifcantly to the marked surge of in bilateral trade in the last one year, according to India’s ambassador to Peru Manpreet Vohra.
Peru, Latin America’s sixth largest economy, has become one of the leading trade partners of India in the region. Taking account of huge untapped potential, India and Peru are looking to start a free trade area agreement soon. The FTA could prove to be a game-changer of sorts for India in a country where China, aided by its behemoth state-owned enterprises, has made rapid foray. China has already sealed an FTA with Peru. The talks during the vice-president’s visit to Peru could also see the finalization of a Bilateral Investment Promotion Agreement between India and Peru.
The mining sector has seen a wave of new Indian investments by Indian companies, with cumulative value of around $35 million. IFFCO has a major stake in a mammoth potash and phosphates mining operation in northern Peru. Zuari Agro, partnering with Mitsubishi, has a 30 per cent stake in the same mining facility. Top Indian brands like Tata Consultancy Services, Aegis, Wipro and Mahindra Satyam have opened their offices in Peru. Nearly all leading Indian pharma companies have either representative offices or set up local subsidiaries in Peru.
“The business potential of Peru is huge. There are many areas ripe for Indian investment in Peru,” says Shankar Darbari, an Indian investment banker who has been in Lima for the last seven years.
India Inc. has sensed this potential and will be looking to harness more opportunities with the launch of INCHAM. The upbeat projections for Peruvian economy should aid this process of accelerated economic engagement. Peru’s Central Bank has projected that the country’s economy is likely to grow between 6.2 percent and 6.3 percent in the fourth quarter of 2013. The annual growth is projected at 5.7 per cent, a dip of 1 per cent compared to last year, which is attributed to weaker commodity prices and declining demand from China. These temporary hiccups apart, the investor community says the long-term outlook for the Peruvian economy should be bright and reassuring.
(Manish Chand is Editor-in-Chief of India Writes, www.indiawrites.org, an online magazine and journal focused on international affairs, the India Story and dialogue among cultures.)
Author Profile
- Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.
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