India-Latin America Relations

India has always maintained a good relationship with various parts of the world, such as East and South Asia, Australasia, North America etc. India’s socio-economic affinities, strategic geographical location, and more Indian people settling in other countries have contributed to such interrelationships. But, India Latin America relations have not been developed much as not much migration from India has been to these areas; there have been cultural and spiritual differences between the two countries that made Latin America consider India distant. But there is a lot of potential in this relationship. In 2018, the combined GDP of both countries reached almost US$ 8.4 trillion.

This article will discuss India-Latin America Relations in the context of the IAS Exam.

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Background of India-Latin America Relations

Latin America and the Caribbean (LAC) comprise three regions – The Caribbean region, Meso-America (from Mexico to Panama), and South America’s continent. The first Prime Minister of independent India, Jawaharlal Nehru, met the Latin American delegations in 1927 in Brussels, where the International Congress of Oppressed People was held. The interest grew from then on. However, ten years earlier than this, in 1917, Mr M. N. Roy, the leading communist ideologue of India, took an active and influential part in developing the Mexican Communist Party.

Since 1990, the situation has gone through a radical change. From this year, liberalisation opened up India, and the country found LAC as a promising market for software, textile, pharmaceuticals, automobiles etc. On the other hand, LAC countries like Argentina, Brazil etc., were full of gold and coal mines, hydrocarbons, widespread arable land etc. Indian and LAC organisations signed various agreements and MOUs and came up with different collaborative projects.

Growth of India Latin America Relations

India Latin America Relations have gone through exponential growth in joint business ventures. India and LAC have invested jointly in industries like aviation, ethanol, defence, agriculture, hydrocarbon etc.

Trades between India and LAC countries such as Venezuela and Argentina have also been promising. Though the volume is lesser, trade between India and Peru is also significant. The main items for exchange are crude oil, copper, edible oil etc. India exports engineering commodities, IT services, textiles, pharmaceutical items etc. Both public and private companies from India invest in the LAC-India business. Some of these companies include Oil and Natural Gas Corporation (ONGC), Videocon, Reliance, Gammon India etc.

BRICS and BASIC

BRICS is an acronym, each letter of which stands for the name of countries. The countries are:

• Brazil
• Russia
• India
• China
• South Africa

These are the world’s most promising and emerging economies in the 21st century. These countries meet regularly to formulate strategies to promote economic growth through expansion of trade, infrastructure, agriculture, finance, banking, SME development, etc. These meetings also chalk out standard policies that would yield practical consequences for all the countries.

BASIC comprises the following countries:

• Brazil
• South Africa
• India
• China

These countries come together informally to consult and coordinate strategies that would affect the environment-related negotiations.

Opportunities of Trade

• The business relationship between LAC and India still has a lot of opportunities to grow. Effective cooperation among the countries can bring more profitability in the sectors of renewable energy, aerospace cooperation, agricultural technologies etc. Newer and more developed agreements on international cooperation are needed so that the existing trade relations are more facilitated.
• Ministries of the Indian government need to come forward more to strengthen the relationship. Involvement of Chambers of Commerce, Government of India Foreign Ministry, Federations of Industry will ensure increased activities.

Latin America is a source of immense possibilities, and the continent is quite receptive to India’s policies and partnerships. A concrete trade relationship development can surely contribute to a higher return on investment.

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