India has decided to expand its engagement with the Latin America and Caribbean (LAC) countries to give fillip to trade and investment in the region that has seen unprecedented growth over the last few years with several Indian automobile and energy companies deciding to set up their manufacturing hubs there.
The Narendra Modi-led government?s attempt is aimed at getting more foothold for Indian companies to invest in the LAC region, especially in areas of food and energy security. LAC is the second-largest supplier of crude oil to India and closer ties with LAC will help India in meeting its oil demands.
There is a need to enhance and explore business opportunities in other areas such as agriculture, energy especially, renewables, IT and ITeS, sources said.
As part of this exercise, R Swaminathan, special secretary (Americas), ministry of external affairs, is scheduled to visit Latin American countries ? Colombia, Bolivia and Nicaragua ? next month, the dates for which are in the process of being finalised. On the agenda is to explore partnerships in areas ranging from hydrocarbons to pharma, textiles to leather, engineering goods to automobiles.
Currently, a total of 36 Indian companies ? from the automobile, information, and energy sectors ? can be found in Colombia. Before 2010, the country was home to less than half a dozen Indian companies. Alongside the increased number of Indian firms, Colombia has doubled its exports to the Asian subcontinent. While oil still accounts for the vast majority (90%) of these exported products, Colombia has begun to introduce other goods to the Indian market, including flowers and coffee.
This increase in exports has allowed Colombia to possess a trade surplus with India, which sells around $1.055 million in products to Colombia each year.
Indian companies such as Reliance, United Phosphorus, Shree Renuka Sugars, Apollo International, Bajaj, TCS, Wipro, Essar, and Hero, are already present in the region and efforts are now on to open agriculture and mining sectors.
Bolivia has already extended its support to India?s stand on food security at the WTO and is willing to open its commodities sector to investment by Indian entities, especially in the area of high-value agriculture produce. Nicaragua, on the other hand, is keen on Indian companies to invest in its gold mines and other high value minerals.
?The visit of the special secretary to Bolivia is very important for the relationship between the two sides. During the visit the first ever bilateral Commission will be set up which outlises the contours of relationship between countries, also an MoU will be signed for diplomatic visas,? Jorge Cardenas Robels, ambassador of Bolivia in India told FE.
According to him, ?Sectors including pharma, energy, textiles are very important and we are keen to have Indian participation in the country.?
As part of India?s offer to several SICA countries to establish IT Training Centres, a centre has been set up in the Nicaraguan capital Managua and trainers from NIIT were engaged in imparting training to students.
There have been hectic activity in the last three months between India and the South American region, with increased high-level bilateral visits from the region to India, especially after Prime minister Modi attended the BRICS summit in Brazil, where he had an oppurtunity to meet with leaders of twelve countries in that continent including the presidents of Bolivia, and Colombia.
So far over 100 Indian companies have invested in excess of $15 billion in Latin America. Likewise, Latin American companies have invested a total of slightly less than $1 billion in India in steel, multiplexes, bus assembly, auto parts and electrical motors.
The LAC region is home to around 600 million people, accounts for a combined GDP of about $ 12 trillion (PPP basis), and received $ 179 billion of FDI in 2013, the highest record for any region in the world.
India, with a GDP of $ 5.5 trillion (PPP basis) and a 1.25 billion strong market is also set to see a quantum jump in inward FDI over the next few years.
