Day 88 – Q 4.What are India’s interests in Latin America? Have we been able to tap the full potential of engagements with the Latin American world? Critically examine
4. What are India’s interests in Latin America? Have we been able to tap the full potential of engagements with the Latin American world? Critically examine.
लैटिन अमेरिका में भारत के क्या हित हैं? क्या हम लैटिन अमेरिकी दुनिया के साथ जुड़ाव की पूरी क्षमता का दोहन कर पाए हैं? समालोचनात्मक जांच करें।
Latin America is generally understood to consist of the entire continent of South America in addition to Mexico, Central America, and the islands of the Caribbean whose inhabitants speak a Romance language such as Spanish, Portuguese, and French.
India’s interests in Latin America
- Latin America is also very rich in minerals such as copper, lithium, iron ore, gold and silver. It gives India an opportunity to increase investments for their extraction as well as for their imports at cheaper rates.
- India’s exports to Latin America increased by 9.6% in 2018-19 (April to March) reaching $13.16 billion from $12 billion in 2017-18.
- The region is very important for India in order to achieve its global ambitions such as in order to pursue its membership of the UNSC, the NSG and at various other negotiations like climate change, terrorism, trade, etc
- India is cooperating with Brazil at platforms like BRICS, IBSA which has provided an alternative platform for developing countries and reduces their dependence on existing institutions controlled by west.
- Currently India sources 15% of its crude oil from Latin America countries.
- Latin America is also an important partner in the India led International Solar Alliance.
- Latin America region is five times that of India and only has half as much population.
- India is importing pulses and oil seeds from many of African and Southeast Asian countries at very high costs.
We have not been able to tap the full potential of engagements with the Latin American world
- India has good relations with countries like Brazil, Mexico, Chile but other countries lag behind.
- Though trade in commodities continues to grow and has reached $46 billion in 2012-13, but it is nothing compared to the Chinese trade of $250 billion with the region which is set to double itself in the next 10 years
- Rivalries between countries like Brazil and Argentina for regional dominance is also affecting India’s relations with the region. For instance while India and Brazil are part of the G4 seeking the UNSC membership, Argentina is part of the coffee club
We have been able to tap the full potential of engagements with the Latin American world
- There has been an upward swing in the relations between India and Mexico after PM Narendra Modi’s visit to Mexico in June 2016, when both countries decided to upgrade bilateral relations to the level of “strategic partnership.”
- After the US, India is Mexico’s largest supplier of automobiles.
- Brazil has historically been the cornerstone of India’s relations with Latin America.
- The entry of Indian generic pharmaceuticals in Latin America over the last two decades has also put pressure on local and multinational companies to reduce their prices and increase the proportion of generic medicines.
- Latin American firms have invested about a billion dollars in India in areas such as soft drinks, multiplexes, theme parks, and auto parts. Latin American software firms have also established development and delivery centres in India, employing over a thousand Indian software engineers.
- Latin America has also emerged as a key contributor to India’s energy security. India now imports 20% of its crude oil from Brazil, Columbia, Mexico and Venezuela.
- In 2012, India overtook China as the largest Asian buyer of Venezuelan oil. India also constitutes one of the largest suppliers of IT services to Latin America, with over 35,000 Latin Americans now employed in Indian IT companies operating in the region.
- New Delhi is also actively promoting official policies intended to further expand Indian IT services in Latin America.
President Ram Nath Kovind’s trip to Suriname and Cuba and Vice President Venkaiah Naidu’s trip to Guatemala, Panama and Peru this year have tried to fill the gap. But much more dialogue needs to be conducted.
India should increase its diplomatic presence in the region, promote Latin American studies, invest in shipping industries, and conclude PTAs and FTAs at the earliest with different countries.
But most importantly, it should remove the psychological barriers that have stopped it from achieving full potential in the relationship.