Peru wants free trade agreement with India Indonesia, India must have closer ties


There is little knowledge in India about this south American nation which has a history of civilization dating back to 5000 years BC. Caral culture is the oldest in all Americas says Ambassador of Peru, Mr. Javier Paulinich. A culture that flourished in the Amazonian region, which showed no signs of violence, very peaceful and many more historical facts that have come to light in the past few years. Mr. Javier Paulinich went into details of the progress made by the country which has the fourth largest forest cover in the world - 60 per cent of Amazon forest. Some excerpts of an exclusive interview to THE BLUE MOON Editor, Amit Mittal :

The large geographical distance between India and Peru has seemingly kept relations between the two countries from growing at a fast pace. Do you agree with this and how can the ties strengthened faster?

“China is very active in Latin America, while India is taking the initiative now. India and Latin America have complimentary roles, they can help each other in growth. Latin America is a good market for India’s IT and pharmaceutical industry and the rate of growth in the two regions is continuous. Peru wants a free trade agreement with India to boost trade ties. We made this proposal to India’s Minister of State for Commerce and Industry, Mr. Jyotiraditya Scindia when he was in Peru in September this year. We have such an agreement with US, Canada, China, Singapore, Thailand, South Korea and the one with Japan is in final stages.”

Do you have scope for Indian investment in Peru ? Is it difficult for a foreign investor to invest in Peru ? Do you have a single window service or some other incentives?

“India and Peru have a lot of room for investment and trade. We already have Jindals, Tata, Reliance and many Pharmaceutical companies in Peru. We have a more liberal investment regime. There is no need to get a special permission for a foreign investor in any field. Foreign investor has the same rights as the locals. We have no tax increase for next ten years. A lot of investments are coming in.”

In that case the trade between the two countries must be good?

“Yes, during the past ten years the trade increased to reach a peak of 800 million USD in 2008, then there was this slowdown, but we expect to be around 800 million again during the current year. The balance of trade, however, stands in favor of India.”

Which are the fields where Indian investors can put in their money ?

“Reliance and Jindals are investing in oil. In times to come India can look forward to buying oil from Peru. Indian investors can buy mines of gold and silver. There are no restrictions at all. These mines are all privately owned. China has spent 8 billion USD in the mining sector alone. We export all products coming from our mines.”

Which are the fields where you have bilateral agreements with India and what are the others where more agreements can be reached?

“We have several bilateral agreements with India covering culture, tourism and defence, but we are keen on exploring new fields. We are looking for a free trade agreement as I said earlier. We have already moved this proposal before the Indian Minister, Mr. Scindia and it is expected to be in place in a year’s time.”

We have important collaboration in potato cultivation. We have some 2500 varieties of potatoes, some wild, others domesticated. We have international centre for Potato in Lima. We have a representative in India. We have scientific exchanges in this field. Now we are seeking tohave tea cultivation from India. We will soon have our people in India to learn tea cultivation. As far as appropriate climate is concerned, we have 84 out of 114 climates in the world. We have the Andes mountains, tropical forest and the coastline. The climate is favorable for tea cultivation. There is great potential for tea. We already produce coffee.”

India has been elected to the United Nations Security Council as a non-permanent member, do you support India as a permanent member?

“We support permanent membership of India in the Security Council. It has an important role to play. We trust India. India deserves to be a permanent member of the Security Council. Of course, we support Brazil as well.”

Peru is a developing country. How strong is its economic growth?

“We are doing very well in terms of economic growth. In fact, we are the fastest growing economy in Latin America and Caribbean. We have a growth rate this year predicted at 8.5 %. Inflation is lowest at 2%. We are doing very well in the region. Peru has ten important minerals from mining, of these it holds first five positions in terms of production in the world. It is number one producer of silver in the world followed by copper and zinc. It stands at fifth position in the world in producing gold. This is the situation when we have explored only 10 % of the country’s territory. We also produce oil and natural gas. In terms of fisheries, we are at number two position in the world. Our agro business has just started, we are producing asparagus, paprika and even mangoes.”

Why is poverty still high in Peru?

“We have 35% poverty, but ten years ago, this figure stood at 55%. Poverty is reducing. We need to have income and growth. Our government is willing to reduce even more. Our literacy rate is 85%. We have free education in State owned educational institutions, but private is expensive.”

We rarely hear of Peru when it comes to tourism. Is there any tourist movement between the two countries, specially in view of Peru developing from an ancient culture.

“We do have travelers going to Peru for Machu Picchu which is one of the seven wonders of the world. The Indian Minister, Mr. Scindia also visited Machu Picchu during his visit to Peru in September. To build up tourism between the two countries, we have already invited tour operators from India.”

But there are no air links between Peru and India?

“At the moment there are no direct air links. One has to fly from Delhi to Amsterdam, Chicago or New York to take a connection to Lima. We must build a market before we go in for direct air links. The issue of connectivity is one pending issue that we must resolve. We do not have a government carrier. The airline is private”

I am reminded of a known name from Peru, Simon Bolivar. There is a road in New Delhi named after him to honour him.

“Jose de San Martin and Simon Bolivar have been our freedom fighters.”

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