KARAVAN ADVISORY ENTERPRISES LLP 

 

The Case for Stronger ties between India and Latin America

 

India's trade with Latin America was 43 billion dollars in 2014-15 of which exports were 13.74 billion and imports 29.26 billion. Venzuela was the largest trading partner in the region with 12.24 billion dollars, followed by Brazil- 11.36 billion, Mexico- 6.26 bn, Chile-3.65 bn, Colombia-3.24 bn, Argentina- 2.45 bn, Peru 1.41 bn and Ecuador 1.29 bn.

 

Among the regional economic groupings, Mercosur (Brazil, Argentina, Uruguay, Paraguay and Venezuela) was India's largest trading partner with 25 billion dollars, while the Pacific Alliance ( Mexico, Colombia, Peru and Chile) had a share of 14 billion dollars.

 

Main exports of India to the region were: diesel- 3.25 bn (to Brazil), vehicles and autoparts- 2.47 bn, pharmaceuticals-726 m, organic chemicals- 824 m, equipments and machinery-700 m, garments-654 m, synthetic yarn and fibres-573 m, iron and steel products-455 m, chemical products- 470 m and cotton-406 m. After Brazil and Mexico, the third largest export destination was Colombia (1.1 bn), followed by Peru (820 m), Chile (566 m) and Argentina (460 m).

 

Latin America is a large market with a population of 580 million people, six trillion dollars of GDP and global trade of over two trillion dollars. The consumer segment of the population is growing thanks to the successful poverty reduction programmes of most governments. Over sixty million have come out of poverty line in the last decade. Although the GDP growth of the region is projected to be less than one percent in 2015, the region has stronger macroeconomic fundamentals with high foreign exchange reserves, low external debt and inflation, stronger resilience and potential for higher growth. 

 

India's trade with the region has the potential to reach 100 billion dollars by 2020. The Indian and Latin American businessmen are still in the process of discovering synergies and complementary between the markets of the two sides. 

 

Supported by: Embassy of the Argentine Republic and Brazilian Chamber of Commerce and Industry (ACIT and ACIC)

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