Business with Latin America

Peru

Basic Information
Overview of the Market
Business with India
Trade and Industry Contacts

website of Indian Embassy in Peru http://www.indembassy.org.pe/

Basic Information

map: http://worldatlas.com/webimage/countrys/samerica/pe.htm
Capital: Lima
International Airports : Lima
Seaports: Callao
Free Trade Zones : Paita Ceticos, Loreto Ceticos, Matarani Ceticos, Ilo Ceticos, Tacna Ceticos
Language: Spanish
Electric Current : 110/220 Voltage
Main Cities : Lima,Arequipa , Trujillo , Chiclayo , Piura , Cusco
Major Banks : Banco Continental, Banco de Lima, Banco de Comercio, Nuevo Mundo, Banco Inter-americano, Banco Latino, Banco Wiese Interbank, Banco Santander, Banco Sudamricano

Overview of the Market

population 29 million

GDP 131 billion dollars in 2008

The Peruvian economy has been growing at an average of 5 percent since 2000.Growth in 2006 was 8%, in 2007 8.3% and in 2008 9.3%.

Peru is among the leading mining countries of the world. Mining is an important contributor to foreign exchange earnings to the extent of over forty percent. Copper alone accounts for 23 percent. Gold, copper and zinc are ranked as first, second and fifth most significant export earners.

Peru is the largest producer of silver and the second largest producer of Zinc and Copper in the world. Production of silver is more than 100 millones ounces.

Perú is world's third largest producer of tin, bismut and telurium and the fourth largest in Lead.

fifth largest gold producer in the world. Production is over 200 tons.

rich in Hydrocarbons. produces over 100,000 bpd of crude oil. Total oil reserves are about a billion barrels. Peru exports natural gas to Brasil and Argentina. New oil and gas discoveries have attracted domesic and foreign investment.

Peru is one of the largest fishmeal exporters of the world earning about a billion US dollars.

Leading commercial crops are coffee, asparagus and fruits, sugar and cotton.

Pima cotton and Alpaca wool of Peru are rated as one of the best in the world.

Manufacturing sector includes textiles, agro-industries, iron and steel.

Tourism is an important foreign exchange earner. Annual number of tourists who visit Peru has reached over 360,000.

Peru gets investment grade rating.

Peru's foreign currency debt rating was lifted to investment grade by Standard & Poor's on 14 july. The agency, which raised the ratings to BBB- from BB+, cited the significant decline in Peru´s fiscal and external vulnerabilities as reasons for the upgrade. The move by S&P follows Fitch Ratings upgrade in March of Peru's long-term foreign currency issuer default rating to investment grade.

Peru gets third investment grade rating in December 2009

Peru clinched its third investment grade rating from Moodys, a major credit evaluation agency which has praised the country's ability to withstand the global downturn better than some of its peers. The new rating is Baa3 from the earlier Ba1
Moody´s said " the decision to raise Peru's foreign currency ratings was driven by indications of increased shock-absorption capacity relative to similar or higher-rated sovereigns.¨ This will help Peru to lower its borrowing costs and attract foreign investment flows, which will contribute to higher growth.

Fitch and Standard & Poor's had given investment grading to peru last year. Peru´s economy has been a shining star in the last few years.

Peru and Brazil are the other Latin American economies with investment grade ratings.

Main trading partners are Mercosur , USA , EU, Japan and China besides the Andean Community.

Major items of exports are gold, copper, zinc, fish meal, textiles and agro products. Minerals account for 50% of total exports. Finished products and capital equipments are major imports.

The currency Nuevo sol is fully convertible. Peruvians can have US dollar accounts in banks.

Spain is the largest investor(24.75%) followed by US(22%) and USA (5%).
China is the second largest trading partner .
Peru has signed FTAs with USA, Thailand, China,Canada and Singapore. It is negotiating with Australia, Japan,South Korea

Under the FTA with USA, 80 percent of US exports of consumer and industrial products to Peru will become duty free immediately. The remaining will take ten years. More tha two thirds of American farm products will also become duty-free immediately and tariffs on teh rest will be phased out in 15 yrs. US investors will enjoy the same rights as Peruvians. Peru will improve its intellectual property rights in line with US standards. US companies can bid for government contracts on equal footing with Peruvian cos. Peru is obliged to respect Labour and environment clauses of FTA.

More info on Peruvian market in

www.indembassy.org.pe

Peru- EU Free Trade Agreement

Peru and EU signed a Free Trade Agreement in Madrid during the EU-LAC Summit in May 2010., Peru has the highest bilateral commerce with Germany at US$ 1.76 billion equal to 25.6% of the total trade with the EU. The EU is the main investor in Peru. Over 99% of Peruvian exports to the EU would now be duty-free out of which over 78% comes from the interior of the country, especially agricultural products which were worth US$ 673 million in 2009 (with the Netherlands leading agricultural imports at 3.27%, Spain at 32.65% and UK at 10.94%). The FTA needs to be approved by the European Parliament and the Congress of Peru.

Business with India

Bilateral Trade (US $ million)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Exports from India

122

146

252

504

304

Imports by India

102

210

281

108

Principal items of India ’s exports: Two and three wheelers, pharmaceuticals, textiles,iron and steel products,chemicals, tyres, machinery etc

Principal items of India ’s imports: Copper,silver, zinc, fish meal and cotton.

Bajaj two and three wheelers are established brands in Peru . Ranbaxy, Sun , Ajantha,CIPLA and Dr. Reddy Labs have Peruvian subsidiaries or distributors. NIIT and APTEC have established IT training centers.

There is scope for Indian investment in mining and industry.

Reliance Enters Peru for oil and gas exploration..

Reliance Industries has signed an agreement with Pan Andean Resources for the joint exploitation of the hydrocarbons Block 141, consisting of 1.2 million acres located in the Titicaca basin in Puno province. Whereas Pan Andean would own 10% of the Block, the remaining 90% would vest with Reliance. The company has also taken 30% stake in block 108 and 10% stake in block 39( along with Burlington Resources and Repsol). Reliance has also a joint venture with the Argentine energy company Pluspetrol for a large project for exploration of gas in Peru. In this, Reliance has 20% share while Woodside of australia has 30% and Pluspetrol 50%. Investment in these projects in 2008-12 would be over 600 million dollars.

Jindal has got three oil and gas blocs in 2008.

IFFCO ( Indian Farmers Fertilisers Cooperative ) has invested 25 million dollars in Americas Petrogas, a Canadian company, which has oil and gas projects in Argentina and a potash mine in Peru. IFFCO working on the potash project in Peru, as part of their global fertiliser production strategy. They are planning construction of a potassium chloride plant in Bayóvar (Piura) which will involve an investment of 200 milion dollars. The Bayover brine mine deposit is estimated to contain 6 million tons of potassium chloride.

Peru- India Chamber of Commerce, Lima

This is an active chamber promoting business between the two countries. President is Mr Kishore Gupta

fone 511+9531 3470 and 511+ 4444 200.

mail: kishore@gupta.tc

Trade and Industry Contacts

International Chamber of Commerce-ICC Peru		www.iccwbo.org
Peruvian Confederation of Private Companies(CONFIEP)		www.confiep.org.pe
ADEX (Peruvian Exporters Association)		www.adexperu.org.pe/oportuni.htm
Society of Domestic Industries		www.sni.org.pe
Lima Chamber of Commerce		www.camaralima.org.pe
Peruvian Commerce and Exports		www.comexperu.org.pe
Investment Government Lima Chamber of Commerce National Society of Industry Association of Peruvian Exporters & Importers Confederation of Private Business Inst. Tourism Trade Fairs Investment		www.copri.gob.pe www/bcrp.gob.pe www.camaralima.org.pe www.sni.org.pe www.adexperu.org.pe/oportun. www.unired.net.pe/confiep www.peruonline.net www.feria.com.pe www.promperu.gob.pe