According to India’s Ministry of Commerce and Industry, India’s trade with Latin America in 2007 crossed US$11 billion and increased from US$9billion in 2006. India’s exports were US$5 billion and imports US$6billion. If the trade through third countries is taken into account the total would cross 12 billion dollars.

According to the December 2008 report of ECLAC (Economic Commission for Latin America and Caribbean), India´s exports to the Latin American region increased by 25 percent in 2008. Brazil remained as the top destination with US$2.7billion. Mexico maintained its second position with US$1012 million in January-September, followed by Colombia with US$452 million in January to October, Peru with US$478 million in January-November and Argentina with 386 million in January-November.

Brazil was the main destination of India’s exports. It exceeded US$2 billion. Second top destination was Mexico with US$1.13 billion. Colombia has over taken Argentina as the third largest market for India’s exports in 2006 and in 2007.

Chile was the top exporter to India with US$2.2 billion. It has overtaken Brazil in the last two years. Argentina exported goods worth US$1billion, maintaining its second position.

Chemicals and pharmaceuticals were the top exports of India followed by Engineering products. Reliance was the top trading company with Latin America with their crude oil imports from Venezuela, Mexico, Brazil and Ecuador and export of diesel to Brazil. Copper accounted for 90 percent of Chile’s exports to India. Vegetable oils formed 80 percent of Argentine exports to India.

Big Potential

India’s Focus LAC programme truly broadened the horizons and active business ties and campaigns were being mounted through the Export Promotion Councils. Exporters have been given incentives and support for export promotion to Latin America. A few years ago, the Ministry of Commerce commissioned a study by National Council for Trade Information (NCTI) to explore possibilities of furthering trade and investment cooperation between the two regions.

Among the various policy measures taken by the Commerce & Industry Ministry include measures like the scheme for bearing 50 per cent expenditure for opening of offices by the exporters in Latin America; visits of delegations, participation in trade fairs and market surveys under the market development assistance scheme (MDA); proposal for organising courses in Spanish and Portuguese with the help of IIFT (Indian Institute of Foreign Trade) and opening of a business promotion office at Sao Paulo by the India Trade Promotion Organisation (ITPO). The setting up of private sector marketing agency, setting up of corpus of US$500 million for developing trade with LAC, LOC to LAC from the Exim Bank and development of shipping links.

Many trade barriers have also eased. The shipping costs and transit time to Latin America has come down after the opening of the route via South Africa and there are direct shipping services from Mumbai to Brazil and Argentina. The Ministry has taken an encouraging stand for reciprocal visits of economic missions of trade and investment in promoting contacts and networking among the two regions, and also exploring opportunities for partnerships, joint ventures and strategic alliances.

Opportunities

Since the Latin American industries are undergoing rapid modernisation there are immense opportunities for the Indian exporters to supply equipment and machinery. The scope for project exports, operation and maintenance contracts and supplies of locomotives and rolling stock for the railways in Latin America can be another opportunity.

Auto-parts and components carry a lot of scope, as automobiles are one of the leading industries in Brazil, Argentina, Mexico and Venezuela. Over all, the modernisation of infrastructure in Latin America is an opportunity for India through contracts in projects pf power generation, transmission, and port modernisation and transportation sector.