Strengthening Ties: India and Peru’s Emerging Copper Trade

Politics John Brightwater September 17, 2024

Strengthening Ties: India and Peru’s Emerging Copper Trade

Summary
India’s rising demand for copper is prompting a partnership with Peru, a leading global copper producer. The two nations are preparing to finalize a trade agreement that promises to enhance their economic collaboration and ensure a stable copper supply for India. Peru’s significant production capabilities and investments in mining infrastructure solidify its role as an essential partner. Both countries celebrate 60 years of diplomatic relations, positioning them well for future growth in this critical trade sector.

India’s escalating demand for copper is driving a significant engagement with Peru, recognized as a pivotal partner in fulfilling this need. The two countries are progressing towards finalizing a trade agreement, which aims to strengthen their economic ties and better serve India’s growing copper market. A senior diplomat signaled upcoming discussions on copper imports, underscoring the urgency of these negotiations. The importance of copper has significantly increased owing to its critical role in clean energy solutions, such as wind turbines and electric vehicles (EVs). This shift has been reflected in India’s import figures; in the fiscal year 2024, copper concentrate imports surged to approximately Rs 26,000 crore—a substantial increase from Rs 13,000 crore in FY19. This trend highlights India’s rising reliance on overseas sources to meet its copper consumption. Peru has established itself as one of the leading players in the global copper landscape, becoming the second-largest producer and exporter in 2023, with a record output of 2.75 million fine metric tons (FMT). Projections indicate that copper production in Peru may rise by four percent in 2024, approaching three million metric tons. Major mining corporations, such as Minera Las Bambas S.A., Minera Antamina S.A., and Sociedad Minera Cerro Verde S.A.A., significantly contribute to this production. Notably, over 75% of Peru’s copper exports were directed to China in 2023, with Japan and South Korea also being considerable markets. Investment in Peru’s mining sector remains robust, despite a noted decline of about 9.9% from the previous year, with cumulative investments exceeding USD 4.7 billion in 2023. China has been particularly active, representing 20.8% of these investments, followed by Canada, Mexico, and the United States. The anticipated trade agreement between India and Peru signifies an essential enhancement of their growing partnership. This agreement is poised to facilitate more seamless trade operations and strengthen economic collaboration, ensuring a consistent copper supply for India. Currently, India diversifies its copper imports to include copper ore, wire, and refined copper products, having imported approximately $2.98 billion worth of copper ore in 2022, where Peru featured prominently among key suppliers. Furthermore, Peru’s strategic initiatives in mining infrastructure aim to solidify its standing as a central hub for international trade. The Chancay mega port, slated for inauguration in November, is expected to elevate Peru’s logistical capabilities significantly. Positioned just 80 km north of Lima, this port will accommodate the largest vessels, enhancing Peru’s connectivity to global markets. Additionally, the planned “Corío” port project aims to reiterate Peru’s critical role as a logistics center in Latin America, fostering economic development and enhancing trade potential with countries such as India. As India and Peru celebrate the 60th anniversary of their diplomatic relations, this impending trade agreement and the associated increased cooperation reflect the natural progression of their longstanding partnership. Both nations have navigated complex geopolitical environments together, and their shared interests in copper trade signal promising potential for mutual growth. Peru’s appealing investment landscape, characterized by a stable macroeconomic backdrop and substantial foreign direct investments in the mining sector, positions it well to address India’s burgeoning copper requirements.

The burgeoning industrial sector in India, coupled with the global transition towards clean energy technologies, has significantly increased the demand for copper. Peru, recognized as a top global copper producer, is in a favorable position to capitalize on this demand through enhanced trade relations with India. The anticipated trade agreement between the two nations is set against the backdrop of their longstanding diplomatic ties, which have spanned six decades, highlighting their mutual interests in economic cooperation and resource trade.

In conclusion, the burgeoning copper trade between India and Peru signifies not only a strengthening of economic ties but also reinforces both countries’ strategic interests in catering to the global demand for this essential metal. As Peru prepares to solidify its role as a key supplier and logistic hub, the anticipated trade agreement heralds a new chapter in the partnership, aiming to satisfy India’s increasing copper needs while promoting collaborative growth across both economies.

Original Source: www.financialexpress.com