IDB study: Trade between India and Latin America reached $30 billion in 2016

Through its Institute for the Integration of Latin America and the Caribbean (INTAL), the Inter-American Development Bank (IDB) has launched a new study, “Latindia: The Future of Cooperation between India and Latin America,” which covers issues such as export destination markets, strategic business areas, global value chains, productive synergies, and opportunities for market development between the two markets.

The report estimates that trade between India and Latin America reached $30 billion in 2016, suggesting that there is great potential for economic ties to diversify and continue to grow in the medium term. It also estimates that 50,000 local workers are employed by the approximately 200 Indian companies that operate in the region.

Over 30 global experts contributed to the analysis of South-South integration in “Latindia” The report was edited by INTAL director Gustavo Beliz and Antoni Estevadeordal, manager of the IDB’s Integration and Trade sector.

The publication’s main findings include:

Toward a shared trade agenda: There are currently only two trade agreements between India and Latin America, but as a result of these, around 3000 Chilean products and 450 MERCOSUR products now enjoy tariff preferences on the Indian market. Negotiations are underway for an agreement with Peru. Negotiations with India, whether bilateral, regional or through BRICS, are one area where there is much to be gained in terms of South-South cooperation.

The export challenge: The challenge facing Latin America is how to diversify its presence in India. Just four products account for 85 percent of the region’s sales to India, and in some countries, such as Argentina, a single product (soy oil) represents 90 percent of exports.

Growing trade: Latin America’s share in India’s total trade increased from 1.7 percent in 2000 to 4.6 percent in 2016. Between 2016 and 2017, the main products that the region exported to India were crude oil ($9.5 billion), vegetable oils ($2.9 billion), and gold and precious stones ($1.7 billion).

Investments: Indian investment in Latin American hydrocarbons, pharma, automobiles, agro-processing, engineering, textiles, chemicals, and electronics is estimated to be worth around $20 billion.

The emerging opportunity: India’s 1.3 billion inhabitants represent an extraordinarily large market, one that includes 350 million internet users who already buy goods and services online. The Indian economy is expected to grow by 7.8 percent on average over the next five years and will soon account for 25 percent of the world’s university graduates. Furthermore, according to the report, some 40 percent of Latin Americans have a good or very good opinion of India.

Original source: IDB
Published on 1 February 2018