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India and Latin America: It’s time to tango

July 12, 2014

By Manish Chand

In this part of the world, myths intersect with history, and magic blends with realism. Think of Latin America, and it conjures up vibrant images of a spinning carnival of life: soccer, samba and story-telling. Yes, Latin America is all of these, and much else. It’s an emerging growth pole of the world.

images/fo_2.jpgAnd the good news is that it’s time for Latin America in India’s diplomacy. When India’s newly-elected Prime Minister Narendra Modi heads to Brazil July 15-16 for the sixth BRICS summit, he will probably become the first Indian leader to meet the leaders of a dozen South American countries at one place. The meeting, to be held as part of the BRICS’ outreach to South America, looks set to open new windows of engagement and opportunities between Asia’s third largest economy and a resource-rich vibrant region that is rapidly emerging as an economic dynamo and a growth pole in the world.

Brazil’s President Dilma Roussef, the host of the sixth BRICS summit, has invited the leaders of Argentina, Bolivia, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela. Most of them are reported to have accepted the invitation, and if all goes well, Prime Minister Modi is set to meet them in Brasilia, a day after the first leg of the summit in Fortaleza.

Why Latin America Matters

The meeting, which is taking place barely within a couple of months of Mr Modi taking charge of the world’s most noisy and vibrant democracy, is set to fire the imagination of a business-friendly prime minister who is looking to raise India’s global profile and expand the country’s footprints with the region which boasts a combined GDP of $4.9 trillion and is home to 600 million inhabitants, nearly half the population of India, but with a landmass five times that of India. The region’s economic resurgence is an unfolding story, which has made it a powerful magnet for foreign investment from near and far. Latin America, according to a report by Economic Commission for Latin America and Caribbean of the United Nations, netted 179 billion dollars of FDI in 2013, the highest record for any region in the world.

Business with Latin America

images/fo_2.jpg[In Pic: Vice President at the launch of INCHAM in Lima Peru (Oct 28, 2013)]The economic dynamism of the region is being bolstered by many factors that includes growing political stability, increasing democratisation, the rise of an entrepreneurial class and the youth bulge, with the under 30s accounting for more than half of the population of South America. In a fundamental sense, the economic resurgence of India and Latin America are increasingly intersecting, opening new vistas for business and collaboration cutting across a spectrum of areas. Not surprisingly, bilateral trade between India and Latin America has surged from a few hundred million dollars in the 1990s to 42 billion USD in 2013. Experts say this figure could easily go up to $100 billion if the leaders of both sides blend proactive diplomacy, address issues like enhancing connectivity and leverage multifarious win-win opportunities in a host of areas, including energy, agriculture, food processing, textiles, transport and IT.

images/fo_2.jpg The annual India-Latin America business conclaves organised by the CII and FICCI have crystallised into must-attend platforms to connect business leaders and entrepreneurs of both sides. In this context, R. Vishwanathan, a former Indian ambassador to Argentina and Latin America enthusiast, suggests that India should sign free trade agreements (FTAs) with Mexico, Colombia and Peru —- the second, third and fourth largest destinations of India’s exports in Latin America. "India must also deepen and widen the preferential trade agreements (PTAs) with Chile and Mercosur countries including Brazil—the largest destination of India’s exports in the region,” he suggests. "There are enormous opportunities. Virtually, the sky’s the limit,” says Amitava Tripathi, a former ambassador of India to Brazil.

Food & Energy Security

Food security is another powerful factor that’s driving India to deepen its engagement with the Latin America region, which has vast swathes of fertile land. Brazil, for example, is an agriculture superpower with not just rolling acres of arable land, but is also equipped with cutting edge food storage technologies. Argentina, too, is a leader in agricultural research. The two sides are poised to set up more joint ventures and research collaborations in this area in days to come.

Latin America has also emerged as an important source of hydrocarbons for India in the last few years, with the region contributing around 10 per cent of India’s energy imports. India is set to step up collaboration with Brazil in the area of eco-friendly ethanol. Venezuela, Colombia, Mexico and Cuba are some of important suppliers of oil to India in the region.

Cultural Alchemy

images/fo_2.jpg It’s not just economics and energy that are binding India and the Latin America region. Thousands of miles apart, but kindred in spirit, the region is suffused with a deep love for Indian culture, the arts, dance and philosophy. "They simply love Indian culture. There are more yoga centres in Brazil than in India,” says Hardeep Singh Puri, India’s former ambassador to Brazil.

Strategic Orientation

The India-Latin America relations are increasingly acquiring strategic orientation. Building upon New Delhi’s maiden dialogue with a troika of foreign ministers of the Community of Latin American and Caribbean States (CELAC) in July 2012, the two sides are exploring possibilities of forging an India-Latin America and Caribbean Dialogue Mechanism similar to that of the India-Africa Forum Summit that started in 2008. The region is also critical to multilateral diplomacy and the quest for reforming the global governance architecture, including the reform and expansion of the UN Security Council.

Bonding with Latin America

In the increasingly globally connected world, there is no far-off place. Distances don’t matter when it comes to love, diplomacy or business. Metaphorical flourishes are fine, but it will certainly help if the two sides work proactively on expanding air links between India and leading cities in Latin America. With some tangible steps and inspired diplomacy, Buenos Aires can bond more effectively with Bangalore, Caracas can connect with Chennai, Mumbai can relate to Montevideo and Goa communes with Georgetown. Latin America, a region often described as the last frontier for India’s diplomacy, is open for greater business with India, and India should seize the opportunity with both hands. It’s time to tango, and make things happen.

(Manish Chand is Editor-in-Chief of India Writes Network, www.indiawrites.org, a portal and e-magazine focused on international affairs, emerging powers and the India Story).


References

External Affairs Minister’s Speech on "India-Latin America & Caribbean: The Way Forward” at the CII India-LAC Conclave Valedictory Session

A new synergy: Hola Latin America, Namaste India!

Cultural alchemy: Catching up with Bollywood & Bharatnatyam in Per

Spicy India, The Asian giant wants to increase its trade relations with Latin America

Fusing adventure with diplomacy: India’s Latin America odyssey

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