Context of the India-Latin American relations

By Priya Chetty on January 21, 2012

Latin America and India are not only in different neighbourhoods, as it were, but have also been members of different clubs. In addition to the considerable distance between South Asia and the Western Hemisphere, they have also been part of very different international groupings. India was the founder and leader of the Non-Aligned Movement (NAM), a largely Afro-Asian lot, of which very few Latin American countries were full and active members.[1] The latter have tended to stick to themselves in various regional bodies What used to be called the British Commonwealth has been another significant reference point for New Delhi, albeit one where, almost by definition, no Latin Americans are to be found[2].

The inward-looking, import-substitution development strategies (ISI), followed both by India and by most Latin American countries from the fifties to the seventies, were not exactly conducive to trade diversification, bringing about Latin America’s debt crisis in the eighties. In the early nineties, trade between India and Latin America was negligible[3]. Yet, in the course of one decade,  the moment these two regions started to open up, the volume of trade increased significantly, with Indian exports increasing eleven times. By 2004, inter-regional trade had reached U$ 3 billion, a lot better than the meagre U$ 475 million of 1991-1992, but still a very modest amount. In 2003, in fact, just one Latin American country (and not even the biggest one), Chile, exported more to China (a little over U$ 3 billion) than all of Indo-Latin American trade put together, and the figures on Chinese-Latin American trade had reached U$ 30 billion by then, ten times more than trade with India. (Beyond Neruda and Tagore: The Challenge of Indo-Latin American Relations: Jorge Heine, Ambassador of Chile to India and Sri Lanka)

India’s trade with the region is quite limited in relative terms. Nevertheless, it has been increasing significantly during the past few years. India’s exports to the world have grown in nominal terms during the past five years by 24.6%. During the last year, exports totalled US$ 183.084 billion. When compared with US$ 75.386 billion that were exported during 2004, Only 3.2% of the total exports of this country have Latin America and the Caribbean as its final destination. During 2008, the total amount of exports to the region amounted to US$ 5.898 billion. As evidenced in tables 1 & 2[4] below – which shows both the performance of Indian exports to the region and its imports from Latin America and the Caribbean – the increase in trade exchanges with our region has been quite significant. The growth rate of Indian trade with the region has been higher than the growth rate of the general trade of the Indian economy. Hence, the relative weight of exports of India to the region has increased during the past few years. In 2004, Indian exports to Latin America and the Caribbean accounted for 2.4% of the total foreign sales of India. In turn, during 2008, this figure grew to 3.2% of the total reported. (Direction of Trade Statistics (DOTS) published by the International Monetary Fund)

  • [1] At the original meeting in Bandung on April 1955, which was to originate the NAM, only African and Asian countries were present, although this changed subsequently.
  • [2] This, of course, is not valid for Caribbean nations, like those of CARICOM, which are active members of the Commonwealth. The whole issue of Indo-Caribbean relations deserves a somewhat different treatment from those Indo-Latin American ones, especially in the light of the significant communities of Indian origin to be found in the English- and the Dutch-speaking Caribbean, particularly in Trinidad, Guyana and Surinam, but also elsewhere.
  • [3] Trade between India and Latin America in 1991-1992 was U$ 473 million, with Latin America exporting U$ 349 million and importing U$ 124 million from India.
  • [4] Source: Government Of India, Department of Commerce –National Informatics Centre