India and Peru are accelerating discussions to finalize a Free Trade Agreement (FTA) by the end of 2025, aiming to unlock mutual trade opportunities, especially in the critical area of rare earth minerals. This strategic agreement is set to play a pivotal role in securing India’s supply chain for clean energy technologies, electric vehicles (EVs), and digital infrastructure.
Rare earth elements—used in EV batteries, wind turbines, and semiconductors—are considered vital to India’s long-term transition to green energy. With China imposing export restrictions on these strategic materials, India is seeking to diversify its sources. Peru, which is rich in rare earth and other critical minerals, is emerging as a key partner in this effort.
India’s Ministry of Commerce and Industry recently confirmed that advanced talks are underway, highlighting rare earths as a core component of the ongoing negotiations. “This FTA is not just about tariffs—it’s about resource security and future-proofing our clean energy ambitions,” said a senior official involved in the talks.
Peru is one of Latin America’s fastest-growing economies and holds significant reserves of lithium, copper, and other minerals essential for battery storage and renewable energy. An FTA with India could open up a major Asian market for Peruvian exports, while offering India a strategic gateway to South America’s mineral wealth.
Beyond rare earths, both sides are working on reducing trade barriers in sectors like pharmaceuticals, agriculture, textiles, and digital technology. India is pushing for enhanced market access for its generic medicines, a globally competitive sector. Peru, on the other hand, is interested in expanding its agricultural exports to India, particularly avocados, blueberries, and quinoa.
A focus on clean technologies and digital cooperation is also part of the negotiations. Both countries are exploring investment partnerships in renewable energy, particularly solar and wind, and digital technology infrastructure such as data centers and fintech platforms.
Experts suggest that the FTA could be transformative for Indo-Latin American relations. According to Dr. Suranjan Gupta, Executive Director of the Engineering Export Promotion Council (EEPC), “This agreement can become a benchmark for India’s future pacts in Latin America—securing critical inputs for our green growth while opening new markets for Indian industry.”
Currently, bilateral trade between India and Peru stands at around $3 billion, with room for significant growth. The Indian embassy in Lima noted that the agreement would help reduce duties and streamline customs procedures, giving Indian companies a competitive edge in the Peruvian market and vice versa.
Negotiators from both sides are aiming to conclude the comprehensive agreement by the end of 2025. If successful, it would mark one of India’s most strategic FTAs focused not just on economic benefits but also long-term national energy security and technological resilience.
Sources:
- Ministry of Commerce and Industry, India
- Embassy of India, Lima
- The Economic Times (2025)
- Reuters Latin America Trade Brief (July 2025)
