India’s exports reached 13.2 billion dollars in 2019-20 (April-March) from 10 billion in 2015-16, according to the figures just released by the Commerce Ministry of India.
Brazil came back this year to claim its position as the # 1 destination of India’s exports to the region, with 3.97 billion dollars, overtaking Mexico.
The other major destinations were:
Mexico 3.62 billion dollars,
Colombia 1.04 billion,
Chile 793 million,
Peru 764 m
Argentina 763 m.
Surprisingy, exports to Venezuela doubled to 340 m doubling from 165 m in 2018-19
Exports to Mercosur was 5005 million, Pacific Alliance 6223 m, CAFTA (Central America + DR) 1200 m and others 754 m
Major exports
Vehicles 3231 million dollars
Chemicals 2576
Machinery 1426
Textiles 1058
Diesel 1049
Pharma 962
Cotton. 359
Plastics. 386
Iron and steel 394
Aluminium products 342
Rubberproducts 264
Car exports
Latin America accounted for 28% of India’s global car exports of 6.7 bn dollars. Mexico was the second largest global market for Indian cars after US.
Other major destinations: Chile 178 m, Peru 139 m, Paraguay 44m, Bolivia 42 m, Colombia 37 m and Guatemala 31 m.
Motorcycles
India was the second largest supplier of motorcycles to Latin America with 458 million dollars. This is 22% of India’s global exports of 2.1 bn.
Major destinations were Colombia 228 million dollars, Mexico 69 m, Guatemala 54 m and Peru 20 m. Colombia was the second largest global market for Indian motorcycles after Nigeria. Indian brands are market leaders in Colombia and Guatemala. Hero Motors has invested 80 million dollars in a production plant in Cali, Colombia.
Pharmaceuticals
India is the fifth largest supplier of pharmaceuticals to Latin America. Major destination of India’s pharma exports: Brazil 297 million dollars, Chile 93 m, Peru 69 m, Colombia 65 m, Mexico 64 m, Guatemala 44 m, Venezuela 39 m, Dominican Republic 39 m and Ecuador 30 m.
India’s exports to Latin American countries in comparison to neighbours and traditional trading partners
India’s exports to some of the distant Latin American countries were more than the exports to neighbouring countries or traditional trade partners with same or more population.
Examples:
- 213 million dollars to the Dominican Republic (population 11 million) vs 188 m to Cambodia (population- 16 m)
-253 m to Ecuador ( pop-18 m) vs 202 m to Kazhakstan (pop- 19 m)
-185 m to Honduras (pop 10 m) vs 180 m to Uzbekistan (pop 33 m)
-1043 m to Colombia (pop 50 m) more than the exports of 933 m to the neighbouring Myanmar (pop 53 m)
-3.97 bn to Brazil and 3.6 bn to Mexico vs exports to Russia (3.02 bn), Nigeria (3.61 bn), Egypt (2.5 bn), and Canada (2.85 bn)
India exported more motorcycles (228 million) to Colombia than to neighbouring markets such as Sri Lanka (176 m), Nepal (198 m) and Bangladesh (156 m).
India’s car exports to Chile at 178 million dollars are more than the exports to Nepal (107 m), Bangladesh (72 m), Sri Lanka (40 m) and Myanmar (15 m).
Service Exports
TCS had an annual turnover of 700 million dollars in 2019 in Latin America. This includes services to local clients as well as to those in North America and Europe. TCS employs 17560 Latin American staff in the region.
The annual turnover of all the two dozen Indian IT, BPO and KPO firms in Latin America should be around 1.5 billion dollars.
Indian manufacturing companies in Latin America
UPL has an annual turnover of over 2 billion dollars with its plants making agrochemicals and development of new seed varieties in Brazil, Argentina and Colombia. UPL, the largest Indian agrochemical firm, has a larger business turnover in Brazil (1.2 billion dollars) than its business in India.
Aditya Birla’s group company Novellis has Aluminium and carbon black plants in Brazil with an annual turnover of 2 billion dollars.
Mothersons Group, the autoparts major with a worldwide revenue of 11 billion dollars has over a dozen plants in Mexico and Brazil generating 9.2 % of its global revenue, which amounts to about a billion dollars.
There are a number of other Indian companies operating in the region in energy, pharma, tyres and other sectors.
The annual revenue of the Indian manufacturing companies in Latin America should be around 6 billion dollars.
Imports
As in the past two decades, Venezuela continued to be the main sources of imports in the region with 6.06 billion dollars. Other main sources: Mexico 4.3 billion, Brazil 3.07 bn, Argentina 2.33 bn, Peru 1.58 bn, Chile 1.18 bn, Bolivia 846 m and Colombia 811 m.
Main import items
Crude oil 11009 million dollars
Gold. 3743
Veg oil. 2188
Copper. 1079
Machinery 612
Chemicals 426
Wood 349
Iron&steel 332
Raw Sugar 249
Plastics. 162
Fruits& veg 158
Pharma. 86
Sources of crude oil imports: Venezuela 6.03 billion dollars, Mexico 3.3 bn, Brazil 1.1 bn, Colombia 290 m and Ecuador 254 m.
Gold import sourcing: Peru 1424 million dollars, Bolivia 843 m, Colombia 420 m, Brazil 369 m, Dom Republic 339 m and Argentina 190 m.
Argentina was the second largest (overtaking Malaysia) source of edible oil in the world with 1.95 billion dollars after Indonesia.
Trade 2019-20
Country
|
exports
|
imports
|
Total trade
|
Mexico
|
3623
|
4297
|
7920
|
Brazil
|
3967
|
3072
|
7039
|
Venezuela
|
340
|
6057
|
6397
|
Argentina
|
763
|
2327
|
3090
|
Peru
|
764
|
1575
|
2339
|
Chile
|
793
|
1176
|
1969
|
Colombia
|
1043
|
811
|
1854
|
Bolivia
|
113
|
846
|
959
|
Ecuador
|
253
|
362
|
615
|
Dom Republic
|
213
|
361
|
574
|
Panama
|
239
|
76
|
315
|
Guatemala
|
291
|
23
|
314
|
Uruguay
|
148
|
57
|
205
|
Honduras
|
185
|
19
|
204
|
Costa Rica
|
127
|
49
|
176
|
Paraguay
|
127
|
25
|
152
|
El Salvador
|
79
|
3
|
82
|
Nicaragua
|
66
|
4
|
70
|
Cuba
|
48
|
4
|
52
|
Total
|
13182
|
20669
|
33851
|
Decade of trade from 2010-11 to 2019-20
India’s exports had increased from 10.04 billion dollars in the beginning of the decade to 13.7 bn in 2014-15. But the Latin American recession and economic difficulties caused a dip in India’s exports in 2015-16. Since then the exports have increased steadily to 13.18 bn in 2019-20.
India’s exports reached a peak of 31.38 billion dollars in 2012-13 due to the high crude oil prices and large volume of India’s imports from Venezuela. But since then, the oil prices have come down and due to US sanctions, the volume of imports from Venezuela has also reduced. Reliance, the main importer of Venezuelan oil had suspended Venezuelan oil imports in the second quarter of 2020. But it has resumed imports in July 2020.
The annual India-Latin America trade had reached a peak of 44.08 billion dollars in 2013-14 due to the high oil prices and large crude imports from Venezuela.
Year
|
exports
|
imports
|
Total trade
|
2019-20
|
13.18
|
20.67
|
33.85
|
2018-19
|
13.16
|
25.7
|
38.89
|
2017-18
|
12.1
|
24.4
|
36.45
|
2016-17
|
10.4
|
19.6
|
30
|
2015-16
|
10
|
19.7
|
29.7
|
2014-15
|
13.7
|
29.3
|
43
|
2013-14
|
12.77
|
31.31
|
44.08
|
2012-13
|
12.48
|
31.38
|
43.86
|
2011-12
|
11.33
|
18.42
|
29.75
|
2010-11
|
10.04
|
14.01
|
24.05
|
Market
Latin America, the region of 19 countries, has a total population of 620 million and GDP of 5.6 Trilion dollars. The region’s imports were 1.07 trillion dollars and exports 1.06 tn in 2019.
Mexico was the top trader with imports of 467 bn and exports of 472 bn.
Brazil's imports were 177 bn and exports 223 bn.
Surprisingly, Chile is the third largest trader with imports of 65 bn and exports of 64 bn. Argentina's imports were 65 bn and exports 49 bn
Peru imports 42 bn and exports 45 bn
Colombia imports 40 bn and exports 42 bn.
Mexico was the top trader with imports of 467 bn and exports of 472 bn.
Brazil's imports were 177 bn and exports 223 bn.
Surprisingly, Chile is the third largest trader with imports of 65 bn and exports of 64 bn. Argentina's imports were 65 bn and exports 49 bn
Peru imports 42 bn and exports 45 bn
Colombia imports 40 bn and exports 42 bn.
There is potential for India to increase its exports to about 20 billion dollars in the next five years if the Indian exporters and government intensify their export promotion seriously and systematically. Although the region’s imports will decrease by over 10% due to the 9.1% GDP contraction forecast for 2020, India can certainly increase its share in the region’s imports.
For example, India can double its pharma exports to 2 billion to Latin America whose annual global imports are around 25 billion dollars. Motorcycle demand is going up in the region, consequent to the need for social distancing after the corona pandemic. This provides an opportunity to take India’s exports to a billion soon.
At this time of austerity, Latin Americans look for affordable products from less expensive sources. Although China fits this expectation, the Latin Americans seek to reduce their overdependence on China with which there is growing trust deficit especially after the Corona virus which originated from Wuhan.
The Latin Americans appreciate the fact that India was the seventh largest destination for Latin America's global exports in 2019 and the third largest in 2018. India is the #1 market for their exports of vegetable oil, #3 for crude oil and #4 for gold. They perceive India as a large growing and transparent market and as the trusted and respected land of yoga, meditation and Gurus at this stressful time of the Wuhan virus.
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