LATIN AMERICA CORNER
India and Latin America see the future not only through
these numbers but as long-term win-win partners with
mutual value addition and complementarities.
pushed millions of people into poverty. Around this time,
India was also undergoing its own transition with Rajiv
Gandhi who brought in a new spirit as the youngest (age 40)
Prime Minister. This was followed by the 1991 economic
reforms and the opening of the market. At this transitional
time, both India and Latin America fl irted with each other
through some transitory interactions and transactions.
Since 2000, the third phase of relations has started with
mutual attraction and romance between the two sides. Latin
America enjoyed unprecedented stability and prosperity in the
fi rst decade of this century termed as the “Growth Decade” -
when millions of poor were uplifted to the middle class by the
Leftist governments helped by the commodities boom. At the
same time, India had also transformed into an emerging power
with high economic growth and aspiration to become a global
player. The New India and the New Latin America of the
twenty-fi rst century started courting each other seriously and
systematically. They discovered mutual complementarities
and synergies. They started building a long-term partnership.
The economic relations have undergone a paradigm shift, as
illustrated below:
India’s exports (2017-18; April to March, the fi nancial
year) of 160 million dollars to the distant and small Uruguay
(15000 km away; population 3.4 million) is more than the
exports of 133 million to Uzbekistan which is just 3000 km
from Delhi and has a larger population of 31 million.
India’s exports of 292 million dollars to distant Guatemala
is more than double the exports of $121 million to Cambodia,
a close neighbour.
India exports more to Central America (956 million
dollars) than to the Central Asian Republics ($365 m)
although the latter is close by and has more population (70
million) while the Central American population is just 46
million.
India’s exports to Mexico ($3.78 billion) are more than the
exports to neighbouring Iran ($2.65 bn) and Thailand ($3.65
bn), and the traditional partners such as Russia ($2.13 bn),
Canada ($2.5 bn) or Egypt ($2.4 bn)
Latin America is the leading destination for India’s vehicle
exports at 3.76 billion. Mexico is the largest market for India’s
vehicle exports with 2.02 billion. Colombia is one of the top
three global markets for Indian motorcycles and used to be
the #1 market a few years back. Hero, an Indian motorcycle
fi rm has invested 80 million dollars in a production unit in
Calli, Colombia.
India has also become more important to Latin America’s
exports. India is the third largest destination of Latin American
exports with 22 billion dollars in 2017. Latin America exports
more to India than to its traditional partners such as Germany,
France, UK, Spain, Italy, Japan and South Korea.
India is the top market for Latin America’s export of
vegetable oil, second largest for petroleum crude and the
fourth largest for copper and gold.
India and Latin America have realised that there is mutual
value addition, going beyond the foreign exchange earned
in exports.
India exports a billion dollar worth generic medicines to
Latin America. This has helped Latin American consumers
and governments to reduce the cost of health care, which has
become aff ordable to millions of poor. The entry of Indian
generic pharmaceuticals in Latin America in the last two
decades had put pressure on local and multinational fi rms to
reduce their prices and increase the proportion of generics as
against the costly patented medicines.
About thirty percent of India’s exports to Latin America
are industrial raw materials such as APIs (Active Pharma
Ingredients - pharma raw materials), organic chemicals,
raw cotton, yarn, fi bre and dyestuff . These have helped
Latin American manufacturing sector to reduce their cost
of production and stay competitive. Most Latin American
pharmaceutical manufacturers import APIs from India.
India values the fact that Latin America contributes to its
energy and food security.
India sources around 15 percent of its global crude oil
imports from Latin America. This helps India to reduce
overdependence on the volatile middle east and diversify
import sources. Oil is a top global export of Latin America
which has large reserves as well as the capacity to increase its
54 • Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 4 • April-May 2019, Noida