India and Peru are set to resume negotiations on a Free Trade Agreement in June 2026, with both sides aiming to conclude the deal by the end of the year. Copper and critical minerals are central to the talks, reflecting India’s urgent need to secure long-term supply chains for its fast-growing economy.
India and Peru are preparing for the next round of discussions on a proposed Free Trade Agreement, scheduled for June. Peru’s ambassador to India, Javier Paulinich, confirmed that negotiations will resume next month, with the possibility of a deal being signed before the year’s end.
The talks are expected to cover a wide range of trade issues, but a particular focus will be placed on critical minerals, especially copper, given Peru’s position as the world’s third-largest producer.
Peru produced approximately 2.7 million metric tons of copper in 2024 and attracted nearly USD 4.96 billion in foreign investment in the sector. India’s Hindalco Industries is reportedly exploring copper purchases from Peru, with negotiations underway.
This aligns with India’s broader policy of encouraging its mining companies to invest overseas to secure supply chains and mitigate potential disruptions. The government has warned that India may need to source between 91% and 97% of its copper concentrate requirements from abroad by 2047.
India’s copper imports rose by 4% to 1.2 million metric tons in the fiscal year ending March 2025. Demand is projected to climb sharply, reaching 3 to 3.3 million tons by 2030 and between 8.9 and 9.8 million tons by 2047. As the world’s second-largest importer of refined copper, India’s dependence on overseas supplies is expected to intensify, making agreements with resource-rich countries like Peru strategically vital.
Beyond copper, the Free Trade Agreement is expected to address tariff reductions, non-tariff barriers, and investment flows across sectors such as agriculture, pharmaceuticals, IT, and clean energy. Bilateral trade between India and Peru has already grown significantly, doubling in five years to reach USD 4.03 billion in 2023–24.
However, India runs a trade deficit due to high gold imports from Peru, which account for nearly 80% of its total imports from the country. Tariff concessions on gold remain a sensitive issue under negotiation, as even minor reductions could substantially increase imports and affect India’s domestic market.
Peru’s exports to India include copper, gold, zinc, silver, molybdenum, and agro-products such as blueberries, avocados, quinoa, asparagus, and grapes. India’s exports to Peru are led by pharmaceuticals, automobiles, IT solutions, and industrial machinery. Addressing logistical challenges, such as limited direct shipping routes and restrictive work permit regulations, will be critical to maximising the potential of the agreement.
The June talks will therefore be pivotal, not only for trade diversification but also for India’s long-term economic security. With copper demand set to surge due to electrification and energy transition, securing stable supply chains through agreements with resource-rich partners like Peru is becoming a strategic necessity.
Reuters
