“With Peru, India will negotiate its first comprehensive agreement with a Latin American country”

Ambassador Jorge Juan Castaneda Mendez of Peru has been in India for barely six months, but he has been working untiringly to promote relations between India and Peru. At his official residence he has created an Art Gallery of the Embassy of Peru with a display of Peru’ s Ancient Cultures ceramics and also launched India Peru Friendship Association. THE BLUE MOON Editor Amitt Mittal spoke to him about bilateral ties between the two countries. Some excerpts from the interview:

Though several bilateral agreements have been signed with India, many other important ones are pending like Bilateral Investment Protection and Promotion Agreement (BIPPA), Customs Cooperation Agreement, Air Services Agreement, Social Security and Cooperation in Health etc. When are they likely to be signed?

Within the Free Trade Agreement to be negotiated there is a chapter on investments, so there is no need for a separate Bilateral Investment Protection and Promotion Agreement (BIPPA).  The Deputy Minister of Foreign Trade of Peru came here in March and agreed with his counterpart Secretary Teotia that negotiations will start next July in New Delhi. With Peru, India will negotiate its first FTA comprehensive agreement with a Latin American country.  It may take two years for the agreement to be signed.

Important is a trade agreement on which agreement has been reached but not yet signed; when is it expected to be signed? Are there any hurdles in the agreement?

FTA negotiations have not yet started. What they have agreed is the terms on which negotiations will develop.   The negotiations will include trade and investment promotion, services, mining, hydrocarbons, intellectual property, traditional knowledge, genetic resources and bio-diversity, infrastructure, small and medium enterprises, automotive industry, agricultural products, food, tourism, creative industries, health care and pharmaceuticals, textiles and clothing, science technology and research. This is a broad scope of areas of the trade agreement that provides plenty of room to develop trade and investment between our two countries. Peru and India are not trade competitors. We have complimentary economies.

The first meeting of the newly established Inter-governmental Joint Commission was expected to be held this month; has it been held and, if yes, what has been the outcome?

The First Joint Commission Peru India has been postponed to June 21th, 2017 when Secretary (East) Madame Preeti Saran will visit Lima. It is expected that this meeting will result in the establishing of a Common Bilateral Agenda between our two countries.

India extended financial assistance for afforestation of a park in Lima named after Mahatma Gandhi; what is the current status?

I am not aware of this project, but three busts of Mahatma Gandhi will be sent soon to Peru to be placed in parks of three main cities.

Trade figures between the two countries seem encouraging with US$ 1.108 billion in 2014 and US $ 1.559 billion in 2015 showing a rising trend; are you satisfied with the trade?

Trade has increased both in quantity and value, but there is a lot more potential to further increase it. It is still one tenth when compared to Peru- China trade which is about USD 20 billion.  India’s global presence has started to increase in Latin America, but compared to China, India is still far behind. There are 14 Indian embassies in Latin America compared to China which has an embassy in each country.

With China and the US being largest trade partners hogging a volume of about 22 % and 20%, India seems far behind; what could be the cause compared to China?

Peruvian-China contacts started in 1852 and one tenth of the Peruvian population is from Chinese ancestors, being the main group from China. India and Peru are starting to know each other more; lack of knowledge and the lack of interest of the entrepreneurs, both Indian and Peruvians, is still the cause of the small trade and investment but it is changing; the process might be slow but it is changing. Presence means a lot.  In Peru, the presence of India is increasing. There are now about 4000 Indians living in Peru which has a population of 31 million. Still the number of Indians is small, but Peru also does not have huge foreign population.

Five Indian companies have currently invested in the mining sector in Peru. It is estimated that their present investment is to the tune of US $ 30 million which stands nowhere near the investment figures of USD 94.26 billion as on December 2016; is the figure cumulative or for the year?

Yes, this is cumulative figure. Peru is a mining country of excellence. We have big companies from China, United States, Canada, Australia, Great Britain which are into mining. Indian mining companies are far behind.

What is the magnitude of Peru’s investment in India?

From the Peruvian side, there are three investments already in India; One, is a soft drink company, the other operates in the mining sector. The third is a company named Vistoni also in Mumbai producing oil for motorbikes.

Is the crude oil production in Peru enough for exports?

Crude oil production is very little compared to other Latin American oil countries exporters like Mexico, Venezuela and Ecuador. We import light oil and we export heavy oil also but only a few hundred thousand barrels.

With 414.1 billion cu metres reserves of natural gas, is Peru in a position to export gas?

Gas is being exported to Mexico under a contract which Peru is trying to re-negotiate as the profit out of this export is very small, but there is a contract so we need to comply.

Peru is said to be the world’s second largest producer of coca leaf, though it lags far behind Colombia and thereby second largest producer of cocaine; how high is the incident of drug trafficking?

Drug trafficking is a problem hard to tackle. We are also affected by the consumption of cocaine, but we are trying to control production of coca which is not an easy task because they are located in remote areas difficult to control; it worries us a lot not only because of its export, but also because our young people are consuming.

But we are improving the fight against drugs every year. This is a global problem; the producing and consuming countries need to cooperate to put a stop to this problem. It is run by mafia that is not from Peru.

Has there been increase in numbers of Indian tourists travelling to Peru and vice versa? What is the total number of tourists that travel to Peru in one year (2016)?

Last year 4000 Indians travelled to Peru and 1100 Peruvians came to India. The large distance between the two countries is a hindrance.

Air tickets are costly and it takes almost 21 hours’ flight time to travel between the two countries. Schengen countries do not require visa to go to Peru. Any Indian holding Schengen, US, UK, Australia visa can visit Peru for 180 days. Other Indians travelling directly to Peru require a visa.

We have also launched India Peru Friendship Association (INPEFA) to bring the people of the two countries closer to each other.