Font size:
Print
A Window of Opportunity for India-Latin America Ties
India–Latin America Ties: A Strategic Opportunity for Deeper South–South Cooperation
Context: In the backdrop of shifting global power dynamics, India is intensifying its outreach to Latin America and the Caribbean (LAC) as part of its broader South–South cooperation strategy.
What is the current status and nature of India–LAC relations?
-
-
Nature of Engagement:
- India–LAC relations have moved from low-key commercial engagements to growing strategic convergence. While historically shaped by commodity trade, recent interactions are increasingly driven by political signaling, technological collaboration, and sectoral complementarities.
- The visits of PM Narendra Modi to Brazil (2024) for the G20 Summit and Guyana for the CARICOM–India Summit, along with honours received from Guyana and Dominica, underline rising political intent and soft power recognition.
-
-
Current Trade and Investment Landscape:
-
-
- Bilateral Trade has crossed US$50 billion, making India one of LAC’s top three export destinations (after the US and China).
- India–Brazil trade surged from US$7.29 billion (2014–2019) to US$11.89 billion (2020–2024), peaking at US$16.8 billion in 2022.
- India–Argentina trade is commodity-driven, with India sourcing over 50% of Argentine vegetable oil exports.
- Investments: Over 150 Indian firms have invested US$16 billion in the region. TCS employs over 15,000 in LAC; Bajaj and Tata have strong market presence.
- Latin American firms like Cinépolis and Marcopolo are also expanding in India.
-
-
Soft Power Indicators:
-
- India’s vaccine diplomacy during COVID-19, including supply to Caribbean nations, has earned goodwill.
- Cultural and educational ties remain limited but are gaining attention through academic MoUs and scholarships.
Why is this moment geopolitically and economically significant for India–LAC relations?
-
Geopolitical Shifts Creating Strategic Space:
-
-
- US–Brazil trade tensions (e.g., Washington’s 50% tariff on Brazilian steel) and the global move to de-risk from China are redrawing trade and investment flows.
- India’s interest in diversifying critical mineral sources (lithium, copper) and reducing energy import dependence makes Latin America strategically vital.
- The G20 IBSA Troika (India–Brazil–South Africa) provides diplomatic continuity in voicing Global South priorities—poverty eradication, climate justice, and sovereign debt restructuring.
-
-
Complementarities Driving Convergence:
-
- Energy & Climate Agenda: Latin America, especially Chile, Bolivia, and Argentina, is central to India’s ambitions for lithium procurement, essential for EV and battery sectors. India’s Biofuel Alliance and green hydrogen cooperation with Brazil and Mexico are furthering clean energy ties.
- Food Security & Rural Development:
Latin America’s agricultural surplus and India’s food processing sector can align for sustainable food systems.
Case Study: Brazilian soybean and sugar exports cater to Indian agri-industries. - Digital Public Infrastructure (DPI): India’s Aadhaar, UPI, CoWIN, and DigiLocker are attracting attention in LAC for digital governance replication, especially in Caribbean nations modernising public services.
What are the major challenges in India–LAC engagement?
- Limited High-Level Engagement:Prime Minister Modi has visited Latin America only three times (2014, 2016, 2024) out of over 90 international trips, reflecting low political prioritisation.
- Geographic & Cultural Distance:Vast geographical separation, a small Indian diaspora (~50,000 in South America), and language barriers (Spanish, Portuguese) hinder people-to-people and diplomatic ties.
- Comparative Chinese Influence: While India’s FDI in LAC is less than 10% of China’s , China is the largest trade partner for several Latin American countries (e.g., Brazil, Chile, Peru) and a major lender and investor.
- Shipping & Logistics Constraints:Absence of direct maritime routes between India and most LAC nations increases logistical costs and reduces trade efficiency.
