India Peru seek FTA to secure strategic mineral supplies

While everyone’s focused on India’s ties with Russia and the US, India is quietly creating a free trade agreement of clean energy and tech ambitions. The core pitch of the FTA is trade and reliable access to critical minerals. These resources are needed for battery storage, electric vehicles, renewable energy grids, and defence technology. As countries like India look to reduce supply-chain exposure to China, Peru’s offering is becoming essential.

Peru’s Mineral Strength and Trade Advantage

Peru is the world’s second-largest exporter of copper and silver. It also ranks among the top four for zinc, tin, lead, and molybdenum. On lithium, it’s expected to enter the top five producers soon. And while it isn’t yet a heavyweight in rare earths. The deposits of neodymium, praseodymium, dysprosium, and terbium are the materials that go into high-performance magnets. These magnets furthermore are used in wind turbines, EV motors, and weapons systems. India’s net-zero goals and defence renovation plans both intersect sharply with this resource pattern.

Negotiations for a full scale Free Trade Agreement between India and Peru are progressing. Eight rounds have been completed by July 2025. The goal is to close the deal by the end of 2025 or early 2026.  The FTA also covers a breadth of investments, pharma, goods,  services, agribusiness, and technology. But it has the inclusion of a dedicated chapter on critical minerals. Such level of particularity reflects how mineral security has shifted from a trade footnote to a geopolitical priority.

Beyond minerals, Peru is also offering logistical value. Its Pacific-facing ports provide a direct corridor which could reduce shipping times and costs for India. It would be a huge advantage especially when compared to routes transiting the Atlantic or longer paths through Southeast Asia. This improves the economics of high-volume mineral imports. It will help time-sensitive industries like battery manufacturing and infrastructure development.

What’s next in the Race for Mineral Security?

In FY 2019 -20, India & Peru bilateral trade stood at 2.34 billion dollars. By FY 2023 -24, it had crossed 4 billion. Interestingly, while India’s exports to Peru have slightly declined from 1.15 billion to 1.0 billion. Imports from Peru have more than doubled, reaching 3.03 billion. The trade is mineral-heavy: Copper dominates, followed by silver and other precious stones. This trade pattern aligns closely with India’s industrial demand curve, particularly in sectors scaling rapidly post-COVID: clean tech, electronics, and heavy infrastructure.

The external environment is only adding to the urgency. China’s export controls on rare earths have introduced a new level of risk into global supply chains. So, for India, Peru’s outreach helps survive those risks.

A stronger Sol can affect how mineral contracts are priced and the profit margins involved. This can be beneficial especially in long-term supply deals. Still, Peru’s economy is stable, which makes it a reliable option for countries looking for steady deliveries and clear policies. Overall, Peru alongside offering to sell minerals, is presenting itself as a long-term partner. The FTA, if executed well, could act as a foundation for much deeper industrial cooperation in a world where mineral access is fast becoming the new oil.