NEW DELHI — Hoping to double trade with Latin America over the next five years, India will expand air and sea links with the region and negotiate more free-trade agreements.From $2 billion in 2000, trade between India and countries such as Brazil, Mexico and Colombia has jumped to nearly $30 billion. The growth is huge, but trade analysts say it still far below potential.
R. Vishwanathan (photo), who is India’s former ambassador to Argentina, Paraguay and Uruguay, says India wants to get food and energy from the resource rich Latin American region. “Latin America has what we need. The three largest items of our imports are crude oil, edible oil and minerals. And in India the need for these will go on increasing because of growing population."
"The region will also offer great investment opportunities to Indian companies. The 2014 World Cup, 2016 Olympics and the 270 billion dollars investment in hydrocarbons by Brazil are the big ticket projects offering unmissable opportunities for Indian companies“, said Vishwanathan.
At a conference in Hyderabad this week, Indian officials said India will address several negative factors, such as high tariffs and poor transport links, as it tries to double trade with the region over the next five years.
India is diversifying its product basket and foreign trade market to shield its economy from uncertainties in Europe and the US. It is also increasing its economic engagement with Africa, Latin America and the Caribbean. As part of its market diversification program, the Indian government is offering various incentives to boost exports to Latin America and the Caribbean.
Additionally, India plans to ease visa rules with countries in the region and is negotiating free trade agreements with Mexico and Peru.
India wants to establish a direct shipping route to cut down shipment time from 45 days to 30 days with countries such as Brazil and Argentina. There is also a proposal for India’s national carrier to establish a direct air link to Panama. Trade analysts say improving connectivity will boost business ties. They point out that China’s trade with Latin America is 10 times higher than India’s, helped partly by better transport links.
"Distance plays an important role. China has good shipping links with those countries through the Panama Canal. We don’t. Our shipping sector is not so strong and the costs of transportation are very high," said Rupa Chanda, an economics professor at the Indian Institute of Management at Bangalore.
Indian companies have already gained a foothold in Latin America. In recent years they have invested $16 billion in sectors such as information technology, energy and pharmaceuticals.
Some companies in the agriculture sector are also attracted by the ample land and water resources in Latin American countries. An Indian company is now among the five top sugar producers in Brazil.
At a time when growth in Europe and the United States is slowing, the growing economies of Latin American countries are emerging as a new frontier.
edited from MercoPress and VOA
