India 27 July 2016: India’s exports to Latin America have taken a massive hit even as the Preferential Trade Agreement (PTA) talks are yet to conclude. India’s exports fell by 34 percent to 7.5 billion USD in 2015-16 from 11.5 billion USD in 2014-15.
However, the Latin American and Caribbean Federation of India (LACFI) which is meeting in Bengaluru now, is of the strong view that closer cooperation between India and Latin American countries will be beneficial not only in terms of trade but also in many other ways.
Trade is the answer
The Federation said that India’s trade with the region has grown from less than $2 billion fifteen years ago, to $46 billion between 2013 and 2014, and includes everything from soybeans to aircraft to minerals. From 2000 to 2009, Indo–LAC trade grew eightfold to approximately $20 billion. That’s still a long way behind the $140 billion in Chinese–Latin American trade, but that gap is likely to be narrowed down in the years ahead. One of the obstacles is geographic and cultural distance, but LACFI believes that modern technology’s ability to shrink time and space can help overcome them
Latin America holds immense potential
Closer cooperation with Latin America holds immense economic potential for India. Latin America’s collective GDP is more than $5 trillion. It has a combined population of more than 600 million, nearly half of which is under the age of thirty. The region constitutes a dynamic, growing and resource-rich part of the world that is witnessing increasing democratization and surging economic growth. These factors helped Latin America attract more $179 billion in FDI in 2013, more than any other region in the world. The profile is remarkably similar to India’s own growth story.
The Federation plays an integral part in the trade links to the South American region and its core activities and operations are critical to businesses and the Latin American Economy.
Prime Minister Modi’s visit re-ignites relationship
Though India-Latin America relations have remained lacklustre due to the immense geographical distance separating the two regions, and competing domestic and international priorities, this trend seems to be changing fast. With the election of Narendra Modi as Prime Minister of India, the ties have become stronger and are in an accelerated mode. The optimism proved justified. In July 2014, just one month after his election, Prime Minister Modi headed to Brazil to attend the annual BRICS summit hosted by Brazilian President Dilma Rousseff. Increased Indian cooperation with Latin America would be consistent with one of the primary objectives of Modi’s whirlwind diplomacy: strengthening India’s economy.
India imports 20% crude from Latin America
Latin America has also emerged as a key contributor to India’s energy security. India now imports 20 per cent of its crude oil from Brazil, Columbia, Mexico and Venezuela by some estimates. In 2012, India overtook China as the largest Asian buyer of Venezuelan oil.
Indian investments over $12 billion in Latin America
India’s private sector has also invested billions of dollars into Latin America, sharply increasing trade flows and expanding India’s global brand. Jindal Steel & Power has invested $2.3 billion in an iron ore mine in Bolivia, the largest foreign direct investment project in Bolivian history. In Trinidad and Tobago, Essar Steel is in the process of constructing a 2.5 million ton steel plant. More than one hundred Indian companies have invested over $12 billion in Latin America across a wide variety of industries, including mining, metals, agriculture, petrochemicals, pharmaceuticals, plastics and plane parts.
Over 35,000 Latin Americans are working in Indian IT companies
India also constitutes one of the largest suppliers of Information Technology (IT) services to Latin America. In 2002, India’s famed Tata Consulting Services, established a Global Delivery Center in Montevideo, Uruguay. Of the fourteen Indian companies operating in Argentina, half are focused on IT-related services. According to some estimates, over 35,000 Latin Americans are now employed at Indian IT companies operating in the region.
Nominated PRESIDENT of LATIN AMERICAN CARIBBEAN FEDERATION OF INDIA
Bangalorean Asif Iqbal, the honorary Consul of Suriname for South India, has been nominated as President of Latin American Caribbean Federation of India (LACFI). Asif Iqbal was the Executive Director of LACFI and is the President of the Defence Technology Infrastructure Society of India. Alexander von Ary from the Ministry of Foreign Affairs, Republic of Chile is nominated Vice President.
The Federation has a group of 33 countries in the Latin American and Caribbean region including the smaller islands. The nominations were announced in the presence of the Chief of Protocol of LACFI Hendrikus van dord, Agriculture Commissioner LACFI; Harlem Bos, LACFI Defense Commissioner; Oz Harpaz, LACFI Petroleum Commissioner; Cullen Bordes, Trade Commissioner Brazil and Avishek Nigam who was responsible for taking Infosys to Brazil.
The announcement in Bengaluru was made by Mani Shankar Aiyar, former Cabinet Minister for Petroleum and Natural Gas and Special Advisor to LACFI. The Federation was in Bengaluru to participate in an event of the Karnataka Region Economic Trade Organisation (KRETO).
Asif Iqbal’s appointment comes at a time when India’s relations with Latin America are on an upswing. The Chairman of LACFI, S.Krishna Kumar, IAS, while congratulating Asif Iqbal said his ‘strong leadership capability will enable him to fulfil his duties at President’.
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