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India exported more to Brazil than to Asian countries like Japan, Korea, and Thailand, the author points out. Here Mumbai port. (Photo: Around the Globe)
Wednesday, October 14, 2015
Perspectives

India & Latin America: Closer Than You Think

Latin American countries closer to India in trade than some traditional trade partners.

BY R. VISWANATHAN

Latin America.. hmm … too far. This is a typical dismissing comment of some Indian businessmen who have the old mindset that distance is a barrier for trade. They also presume that Latin American countries are less important for India's trade in comparison to European countries and the traditional trade partners. Here is a surprise for them. India does more trade with the distant Latin American countries than with some of the neighboring countries as well as European and Asian countries considered as close trading partners. This is evident from the following 2014-15 (April-March) statistics of the Indian Ministry of Commerce.

India's trade with Venezuela ( $12 .24 billion ) and Brazil ( $11.36 billion) in 2014-15 were more than her trade with close neighbors Sri Lanka ($7.4 billion), Bangladesh ( $ 7 billion), Thailand ($9.3 billion) and Vietnam ($9.2 billion) as well as with traditional partners France ( $9.4 billion) and Netherlands ( $8.7 billion).

India had more trade with Mexico ($ 6.25 billion) than with Nepal ($ 5.2 billion), Egypt ($ 4.7 billion) Canada ($5.9 billion), Italy ( $5 billion), Spain ( $ 5.1 billion) and Israel ($5.6 billion).

Trade with Chile ($ 3.65 billion) and Colombia ($ 3.24 billion) were more than with Ukraine ( $2.58 billion) and Sweden ( $ 2.48 billion). Argentina accounted for more trade with India ($ 2.45 billion) than Myanmar ($ 2 billion).

Trade with Peru ($ 1.41 billion) was more than with Ireland ( $1.29 billion). Ecuador ($ 1.29 billion) had more trade with India than Portugal ( $ 0.78 billion), Austria ($1.17 billion), Norway ($ 1.26 billion), Denmark ($1.18 billion), Kazakhstan ( $ 0.95 billion), Morocco ( $1.24 billion) and New Zealand ( $ 0.91 billion). Trade with Dominican Republic ($ 432 million) was more than with Bulgaria ($370 million).

India's import of crude oil from the far off Venezuela in 2014-15 was $12 billion while it was just $ 11bn from Kuwait and $11.4 billion from UAE, which are closer sources.

India exported more to Brazil ( $5.96 billion) than to Japan ( $5.4 billion), Republic of Korea ($4.6 billion), Malaysia ($5.8 billion ), Indonesia ( $ 4 billion), Thailand ( $ 3.4 billion),  Nepal ( $ 4.5 billion), France( $4.9 billion), Italy($5 billion), Spain ( $3.1 billion), Turkey ( $ 5.3 billion), Egypt ( $3 billion), and South Africa ( $ 5.3 billion).

India's exports to Mexico ($ 2.8 billion ) exceed those to Russia ( $ 2 billion), Australia ( $2.78 billion) and Canada ( $ 2.2 billion).

India exported more to Colombia ($ 1.1 billion) than to Switzerland ( $1.06 billion). Peru was a more important destination ( $ 820 million) for Indian exports than Myanmar ( $ 773 million), Bhutan ( $ 337 million), Sweden ( $ 740 million), Portugal ( $ 636 million), Ireland ( $ 759 million), Austria ( $ 363 million), Ethiopia ( $ 783 million) and many Central and East European, Central Asian and some European Union countries.

Exports to Chile ( $566 million) were more than exports to Austria ( $ 363 million), Greece ( $361 million), and Czech republic ( $ 328 million). Exports to Panama ($ 302 million) and Guatemala ( $ 229 million) were more than exports to Cambodia ( $143 m), Maldives ( $152 million) and  European Union countries such as Slovak Republic ( $ 104 m), Slovenia ($ 212 million), the Baltic countries and some Central Asian countries such as Armenia ( $ 91 million), Azerbaijan ( $ 110 million), Belarus ( $ 48 million) and Georgia ( $ 86 million).

It is interesting to note that India exported vehicles worth $ 1.8 billion to Latin America. Mexico is the top destination for India's car exports which reached $ 780 million in 2014-15. Motorcycle exports to Colombia were $270 million. 

Latin America is a large market of 582 million people, GDP of 6.2 trillion dollars and average per capita income of $11,000.


India's trade of $ 43 billion in 2014-15 has the potential to reach $ 100 billion. India's exports of $ 13 billion could be doubled by 2020 if the Indian exporters target the region seriously and systematically.


R. Viswanathan is a Distinguished Fellow of Latin America Studies at Gateway House (Indian Council on Global Relations ). From 2007 to 2012 he served as India’s Ambassador to Argentina, Uruguay and Paraguay. That followed three years as Head of the Latin America Division in the Ministry of External Affairs of India and as Ambassador to Venezuela (2000-2003) and  Consul General of India in Sao Paulo (1996 to 2000).

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