India & Latin American countries should double trade to $100 bn by 2027

 

Latest Context:

• By 2027, India's external affairs minister S. Jaishankar said, the two-way commerce between India and the LAC region should quadruple to $100 billion.

Latin America and the Caribbean (LAC) region:

• Latin America and the Caribbean are referred to collectively as Latin America and the Caribbean (LAC) in English.
• The word LAC refers to a large area that stretches from Argentina and Chile to The Bahamas and Mexico. 

Potential for growth for India and LAC:

Trade:

• In 2022–2023, trade between the two regions was about $50 billion, and India exports $10 billion to Brazil—nearly twice as much as it exported to Japan.
• S. Jaishankar, EAM of India, proposed a four-pillared strategy for increased trade and economic cooperation between India and LAC nations.
• Two new Indian embassies have been established in the area, in Paraguay and the Dominican Republic.
• In industries like agriculture, energy, IT, pharmaceuticals, manufacturing, and autos, Indian firms are present in LAC nations. They have made $15 billion in investments in this area altogether.
• Mexico is India's second-largest market for automobile exports, which make about one-third of all exports to Latin America. Other significant vehicle markets include those in Chile, Peru, Colombia, and Ecuador.
• India now imports oil from Guyana, Colombia, Guyana, Mexico, and Brazil. Last year, the nation imported $7 billion worth of crude oil and petroleum, oil, and lubricant (POL) products from Latin America and exported a same amount of refined goods.

Supply Chain Diversification:

• Since the Covid-19 epidemic had highlighted the necessity for resilient supply networks for redundant sourcing, diversified manufacturing, and food and energy security, India and LAC should consider supply chain diversification.
• The two parties should concentrate on resource partnerships given that India is the world's fifth-largest economy and that its demand for food, gas, and other vital minerals is on the rise. The middle class in LAC nations can also be served by Indian goods and services.

Sharing Developmental Experiences:

• The two sides should exchange developmental knowledge regarding technological advances, medical treatments, and agricultural techniques. India can offer tailored training and exchanges for LAC nations in this situation.

Climate Change:

• The two areas can cooperate to address global issues like climate change, issues facing the Global South, and multilateral structure reform. India and LAC can establish a long-lasting collaboration that will benefit our two regions by utilising our combined strengths, experiences, talents, and resources.

Mobility Arrangements:

• India is prepared to cooperate with LAC nations to make movement easier between our businesses and our people. The two parties should decide whether to enter into negotiations for mobility agreements given the growing significance and mutual benefits of legal mobility.

On Resource Sharing:

• More collaboration in areas including resource sharing for sustainable economies, technology transfer to improve food security, and sector-specific integration with global value chains, such as horticulture. Agreements on mutual recognition in the pharmaceutical industry and FTAs to increase bilateral trade and investment flows. 

 

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