India’s exports to Latin America increase by an impressive 48% to a record 18.9 billion dollars in 2021-22

India’s exports to Latin America reached a record high of 18.89 billion dollars in 2021-22 (April-March), according to the Commerce Ministry of India.  The exports have increased by an impressive 48% from 12.74 billion dollars in 2020-21. 

Brazil continued as the # 1 destination of India’s exports to the region, with 6.49 billion dollars, an increase of 53% from 2020-21.

Mexico was #2 with 4.42 billion dollars – increase of 43%.

 

Argentina came back to claim the third position after many years, with 1.43 billion dollars – an incredible 107% increase from last year.

 

Colombia was #3 with 1.38 billion- increase of 59% from 865 million.

 

Chile joined the Billion Dollar Club for the first time with 1.18 billion, increasing by 47%.

 

The other major destinations were: Peru 898 million and Guatemala 552 m 

Exports to the other countries are in the table below.

 

Exports to the three major trade blocs in the region were: Mercosur were 8.28 billion, Pacific Alliance 7.88 bn, and CAFTA (Central America + Dominican Republic) 1.95 bn 

 

India’s exports to some of the distant Latin American countries are more than the exports to neighboring countries or traditional trade partners with same or more population. This is a trend of the last several years. Examples:

 

India’s exports of 552 million dollars to the distant Guatemala (population 11 million) are more than twice that of the exports of 198 m to the neighbouring Cambodia with a population of 16 million.

Exports of 318 m to the remote Honduras (population 10 m) are more than the exports of 235 m to nearby Kazakhstan with a population of 19 m.

Exports to Brazil (6.48 bn) are higher than to the traditional trade partners such as Japan (6.18 bn) and Thailand (5.7 bn)

Exports to Mexico ( 4.43 bn) are more than the exports to Canada ( 3.7 bn) and Russia ( 3.2 bn)

 

 

Major exports

 

Vehicles     3835 m (increased from 2608 million dollars last year)

Chemicals  3139 m ( 2534 m last year)

Petroleum Products    2111 m.               

Machinery  1664 m                   

Pharma      1486  m                   

Textiles       1015 m                  

Cotton.         761 m                

Plastics.         518 m               

Iron and steel  905 m           

Aluminium products  688 m   

Rubber products 415 m.        

 

Car exports

Car exports to Latin America were 1793 million dollars. This was 30% of India’s global car exports of 5.92 bn dollars. Mexico was the second largest global market for Indian cars with 941 m.  Other major destinations: Chile 337 m and Peru 115 m

 

Motorcycles

Exports of motor cycles were 909 million dollars. This is 30.5 % of India’s global exports of 2.99 bn.India was the second largest supplier of motorcycles to Latin America.

 

Major destinations were Colombia 309 million dollars,  Mexico 174 m, Guatemala 103 m and Peru 43 m. Colombia was the second largest global market for Indian motorcycles after Nigeria. Some years back Colombia was the # 1 destination. Indian brands are market leaders in Colombia and Guatemala. 

 

Pharmaceuticals

Pharma exports increased to 1486 million dollars from 1196 m last year. India ranked as #6 supplier of pharmaceuticals to the region

 

Major destination of India’s pharma exports:  Brazil 374 million dollars, Peru 105 m, Chile 153 m, Mexico 167 m, Colombia 103 m, Dominican Republic 67 m, Venezuela 102 m, Guatemala 64 m, Bolivia 46 m and Ecuador 34 m.

 

 India ranked as #3 supplier of organic chemicals to the region.

 

 

Imports

 

India’s imports from Latin America were 25.62 billion dollars in 2021-22. Major suppliers were: Brazil 5.71 bn, Mexico 4.25 billion, Argentina 4.2 bn, Peru 2.71 bn, Colombia 2.96 bn, Chile 1.37 bn, Bolivia 2.07 bn, Ecuador 1.01 bn and Dom Republic 649 m, Panama 292 m, Uruguay 162 m  and Venezuela 89 m

 

Main import items: 

 

Crude oil  9.18 billion dollars

Gold.        6.91 bn  

Vegetable oil.     4.34 bn 

Copper    995 million dollars

Machinery  545 m

Wood        480

Chemicals 419 m

Iron and steel 321 m

Fruits& vegetables 285 m

 

Main sources of crude oil imports: Mexico 3.42 billion dollars, Brazil 2.25 bn, Colombia 2.32 bn andEcuador 865 million. 

 

Venezuela used to be the major source of oil imports in the region for the last fifteen years. But the US sanctions have drastically cut down the Venezuelan supply from its peak of around 10 billion dollars to just 89 m in 2021-22. There was no import in 2021-22.

 

Gold import sourcing: Peru 2.32 billion dollars, Bolivia 2.06 bn, Brazil 703 million, Dom Republic 600 m, Colombia 548 m, Argentina 465 m and Mexico 147 m.

 

Latin America is the main source of soy oil imports of India. Argentina, as usual, was the #1 globalsupplier of soy oil with 3.27 billion dollars, followed by Brazil 1.07 bn. 

 

 

Trade 2021-22

Figures in millions of US Dollars

 

 

Country	exports	imports	Total trade
Brazil	6489	5713	12202
Mexico	4425	4248	8673
Argentina	1426	4201	5627
Peru	898	2707	3605
Colombia	1377	2964	4341
Chile	1182	1371	2553
Venezuela	334	89	423
Bolivia	118	2073	2191
Ecuador	305	1012	1317
Dom Republic	310	649	959
Panama	348	292	640
Guatemala	552	21	573
Uruguay	151	162	313
Honduras	318	21	339
Costa Rica	148	63	211
Paraguay	211	16	227
El Salvador	162	4	166
Nicaragua	108	10	118
Cuba	27	1	28
Total	18889	25617	44506

 

 

Trade from 2010-11 to 2021-22

 

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 and in 2021-22 spectacularly.

 

India’s imports 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. 

 

The annual India-Latin America trade in 2021-22 has exceeded the peak of 44.08 billion dollars in 2013-14 

 

Year	exports	imports	Total trade
2021-22	18.89	25.62	44.50
2020-21	12.74	14.92	27.66
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

 

 

 

Target - 30 billion dollars

 

Latin America is a substantial market with 19 countries, population of 620 million and GDP of 6 trilion dollars. The Indian exporters are still in the stage of discovery and exploration of the huge potential of the region.

 

The Latin Americans seek to reduce their overdependence on China with which there is a huge trust deficit. As part of their diversification strategy, they attach importance to the large growing market of India which was the 7^th largest destination of their global exports in 2021. They exported more to India than to their traditional trade partners such as Germany, France or UK. India was the #1 destination of Latin American exports of vegetable oil, #3 for gold, #4 for crude oil and #8 for copper.

 

India could set a target of 30 billion dollars in the next three years. This is easily achievable if the Indian exporters and the government intensify their export promotion seriously and systematicallywith adequate investment.

 

Sanctions on Venezuela: a Gringo Game

The US government announced on 17 may that it was loosening the sanctions on Venezuela. It is not because President Maduro has surrendered and bent to the American will. Nor because the US is moved to lessen the suffering of the Venezuelan people.

Lessening the cost of gasoline for the American consumers is the immediate motive. Otherwise, the angry American voters might punish the Democrats in the midterm elections coming up in November. The US wants Venezuela to increase production and exports of oil to fill the gap caused by the embargo on Russian oil. The long term motive is to increase the pain for Russia by reducing the pain of Venezuela a little.  

 

Venezuela is the only country in the Western Hemisphere that could significantly increase production in the short and long term. And Venezuela has the largest crude reserves (298 billion barrels) in the world, much more than even Saudi Arabia(268 billion barrels), who has incidentally rebuffed the US request to increase production. Venezuela’s production has been crippled by US sanctions to about 374,000 barrels per day in 2020, down from the pre-sanction 3.5 million bpd.

 

The American oil company Chevron has told Biden administration that they could help double Venezuela’s roughly 800,000 barrels-a-day production within months, to replace the loss of about 700,000 barrels a day the U.S. was importing from Russia before the Ukraine war. 

 

So, the Biden administration is giving an exemption to Chevron from sanctions to work in Venezuela and increase production. Under the current sanctions, Chevron is prohibited from doing business with the Venezuelan government and is only allowed to carry out essential maintenance work in the country.

 

The US State Department has put out a usual spin on the story saying that they are relaxing the sanctions to help restart the stagnant talks between President Maduro and the self-proclaimed and American-anointed interim President Juan Guaido. The chances of success for these talks have now become less since the Maduro government has become stronger and Guaido has become weaker. So there is no incentive for Maduro to show any flexibility towards Guaido. 

 

Juan Guaido has completely lost his credibility. He has failed in his repeated promises and attempts to remove Maduro from power. He and his friends along with some American lawyers and lobbyists have helped themselves to hundreds of millions of dollars of the Venezuelan government funds in the US banks seized by the US government. He was involved in the foolish and failed attempt of a group of mercenaries to invade Venezuela and capture Maduro in 2019. Many senior opposition leaders of Venezuela have distanced themselves from Guaido.

 

Some countries which had recognized Guaido, under pressure from the US, have started dealing with the government of Maduro quietly. This includes the devious UK government which is refusing to release the Venezuelan gold from their treasury on the ground that they do not recognize the government of Maduro. The group of countries which recognized Guaido was called as “Lima Group” since the decision was taken during a meeting in Lima, (the capital of Peru) where they issued a Lima Declaration in August 2019. At that time Peru had a centre-right government. But now there is a new leftist government in Lima which has ditched Guaido and recognized President Maduro. Some other countries such as Argentina and Chile which had joined the Lima Group are now ruled by leftist parties who have also reverted back to recognizing Maduro. So the American scheme to make a regime change in Venezuela and impose Guaido as president is doomed to fail, for sure.

 

The Venezuelan economy, ruined partly by the US sanctions and partly by Venezuelan mismanagement, had suffered severe GDP contraction every year since 2014.  But the economy has turned the corner now and the worst is over.  IMF has projected a 1.5% GDP growth for Venezuela in 2022. Even the hyper inflation is coming under control. It has come down from the peak of 65374% in 2018 to 1588% in 2021. The Maduro government has managed to increase even the oil production to 800,000 bpd in 2022 from 374,000 bpd in 2020.

 

The US is aware that Venezuela will not give in without clearance from the Cuban, who have coached the Venezuelans how to survive the Gringo sanctions and intimidations. President Maduro had his political education and training in Cuba when he was a young union leader. The Cubans are the veteran survivors of Gringo sanctions for the last sixty two years. Cuba is the victim of the oldest and most comprehensive US economic sanctions regime against any country in the world.

 

The Americans went beyond economic sanctions in Cuba.  The CIA had made numerous attempts to assassinate Fidel Castro. But he died a natural death at the ripe age of 90 in 2016 peacefully after outliving many American Presidents and CIA chiefs. 

 

So the US knows that they need to show some gesture to the Cubans so that they would let the Venezuelans play ball with the Americans. The Biden administration has, therefore, announced on 16 May that it is loosening the sanctions on Cuba too.. They are lessening some restrictions on flights to and from Cuba, family-reunification program, consular services and visa processing, enabling more Cubans to either visit or join their families in the U.S.

 

In the United Nations, year after year, the overwhelming majority of the members of the General Assembly pass resolutions condemning the US embargo and declaring it as violation of the UN charter and international law.  But the US is unashamed and immune to reason or international opinion. 

The unilateral, illegitimate and inhuman sanctions on Cuba have not achieved any foreign policy goals of the US in the last six decades. So it is not going to be any different in the case of  Venezuela. But the Gringos will continue their game of sanctions even when they know that they cannot win. From time to time, they will change the rules of the game and spin different stories to suit their needs and interests, as they are doing it in Venezuela.