India’s exports to Latin American countries are more than to neighboring countries and traditional trade partners

India’s exports to Latin American countries are more than to neighboring countries and traditional trade partners 

                                                     

India’s exports of 266 million dollars in 2023-24 to the remote Honduras in Central America are more than the exports of 185 m to nearby Cambodia and 237 m to Kazakhstan. The population of Honduras is just 10 million as against 17 m of Cambodia and 20 m of Kazakhstan.

 

If you think this is incredible, here are some more:

 

India’s exports of 920 m to Peru are more than the 670 m to Myanmar.

Exports to Brazil (6022 million dollars) are higher than to the traditional trade partners such as Japan (5156 m), Indonesia (5988 m), Vietnam (5470 m) and Thailand (5038 m).

Exports to Mexico (5324 m) are more than the exports to Russia (4261 m), Canada (3845 m), Sri Lanka (4117 m) and Egypt (3520 m)

Three countries in the region are billion dollars plus destinations: Colombia of 1219 million, Chile 1183 million and Argentina 1086 m.

 

India’s exports to Latin America were 19.15 billion dollars and imports 23.75 billion with a total of 42.9 bn in 2023-24 (financial year April-March), according to the Commerce Ministry of India.  

 

 

Car exports

Car exports to Latin America were 1757 million dollars. This was 26.5% of India’s global car exports of 6.63 bn dollars. 

 Major destinations: Mexico 874 m, Chile 266 m and Peru 191 m, Panama 77 m, Colombia 65 m, Ecuador 60 m, and Guatemala 46 m.

 

Motorcycles

Exports of motor cycles crossed a billion dollars reaching 1037 million dollarsfrom 921 m in 2022-23. This is 37.4% of India’s global exports of 2.77 bn.

 

Mexico has replaced Colombia as the #1 global destination of India’s motor cycle exports with 281 million dollars. Colombia was #2 with 224 m and Guatemala was # 4 with 134 m. The other main destinations were: Argentina 95 m, Honduras 56 m, Peru 46 m and Brazil 46 m.

. 

Pharmaceuticals

Pharma exports were 1.63 billion dollars.  

Major destination of India’s pharma exports:  Brazil 417 million dollars, Mexico 212 m, Chile 190 m, Venezuela 99 m, Colombia 129 m, Peru 102 m, Guatemala 73 m, Dominican Republic 60 m and Ecuador 53m.

 

Major exports

Vehicles     4.12 bn 

Chemicals  4.12 bn

Machinery  2.8 bn 

Petroleum Products  1.7 bn                   

Pharma      1.63 bn  

Iron and steel  1.12 bn

Textiles 1.01 bn

Aluminum products  558 m               

Plastics   438 m 

Cotton  438 m  

Rubber products 418 m            

                 

Imports 

Main import items: 

 

Crude oil  7.44 billion dollars

Raw gold.        6.21 bn  

Vegetable oil 2.95 bn 

Raw sugar 1.95 bn

Copper    1.76 bn 

Machinery and equipment 960 m

Iron and steel 606 m

Wood        495 m

Chemicals 476 m

Fruits& vegetables 195 m

Paper pulp 101 m

 

 

Crude oil imports which reached a peak of around 15 billion dollars in 2013-14 has come down drastically due to US sanctions on Venezuela which supplied 10 bn dollars of crude in 2013-14.

 

Main sources of crude oil imports: Colombia 2.13 bn, Mexico 1.87 billion dollars, Brazil 1.48 bn, Venezuela 932 m and Ecuador 332 million

  

Raw gold import sourcing: Peru 2837 m, Bolivia 1077 m, Brazil 213 m, Colombia 737 m, Dom Republic 488 m, Argentina 346 m, Mexico 143 m and Ecuador 338 m. 

 

Latin America is the main source of soy oil imports of India. Argentina, as usual, was the #1 global supplier of soy oil with 1.98 billion dollars, followed by Brazil 1.03 bn. 

 

Brazil is the source of imports of raw sugar which India refines and reexports to other countries.

 

Chile, the main supplier of copper and other mineral concentrates from the region supplied 847 m, followed by Peru 212 m, Brazil 147 m, Panama 135 m and Colombia 115 m.

 

Main suppliers of wood from the region: Uruguay 114 m, Brazil 102 m, Ecuador 88 m, Argentina 76 m, Panama 39 m, Costa Rica 20 m and Colombia 17 m

 

 

Trade 2023-24

Figures in millions of US Dollars 

 

Country	exports	imports	Total trade
Brazil	6022	6210	12232
Mexico	5324	3104	8428
Argentina	1086	2497	3583
Peru	920	3114	4034
Colombia	1219	3086	4305
Chile	1183	1514	2697
Venezuela	175	1000	1175
Bolivia	71	1087	1158
Ecuador	459	797	1256
Dom Republic	347	571	918
Panama	297	371	668
Guatemala	559	30	589
Uruguay	521	135	656
Honduras	266	31	297
Costa Rica	184	118	302
Paraguay	212	31	243
El Salvador	129	3	132
Nicaragua	132	48	180
Cuba	45	2	47
Total	19151	23749	42900

 

 

Trade from 2010-11 to 2023-24

 

 

Year	exports	imports	Total trade
2023-24	19.15	23.75	42.90
2022-23	22.41	25.59	48.00
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

 

The fall in trade in 2023-24 from 2022-23 is due to the  reduced import of crude oil and soy oil from the region and export of petroleum products. 

  

Latin America is a substantial market of 19 countries, population of 620 million and GDP of 6 trillion dollars with a per capita income close to 10,000 dollars. The Indian exporters are still in the early stage of discovery and exploration in the last two decades. 

 

Except for Venezuela and Argentina, the economies of the other 17 countries of the region are stable and growing and have single digit average inflation. Even Argentine and Venezuelan economies have passed their worst and are recovering now. Venezuela’s GDP growth in 2024 is projected at 4%.

 

Latin America contributes to India’s energy security with crude oil helping with India’s strategy to diversify import sources. The region could also contribute to India’s renewable energy projects with supply of Lithium and other critical minerals.  The Lithium Triangle of South America (Chile, Bolivia and Argentina) has more than half of the global reserves. 

 

South America contributes to India’s food security with vegetable oils, pulses, fruits and vegetables. 

 

The Latin Americans seek to reduce their overdependence on China with which there is a huge trade and trust deficit. As part of their diversification strategy, they attach importance to the benign, large and growing market of India. 

 

Export target of 50 billion dollars

 

India could set a target of 50 billion dollars in the next five years. This is achievable if the Indian exporters, export promotion councils, industry bodies and the government intensify their export promotion seriously and systematically with adequate investment. 

 

External Affairs Minister Jaishankar has emphasized the importance of trade and business during his visit to the region last year. He has visited more countries in Latin America than any of his predecessors.

 

India should open embassies in Ecuador, Bolivia, Costa Rica, Honduras, El Salvador, Nicaragua and Uruguay which accounted for 1.76 billion dollars of exports.  Opening of embassies in these seven countries can be done with a mere one percent of the total export earnings from these countries. 

 

The Commerce Ministry should reactivate its Focus LAC program which had given a critical boost to India's exports in the late nineties. 

 

India should start negotiations for FTA with Mexico and Colombia, the 2^nd  and 3rd largest destinations of exports to Latin America besides concluding soon the ongoing FTA talks with Peru. The PTA with Chile needs to be upgraded to a FTA. The India-Mercosur PTA should be expanded with more products and deeper cuts in tariffs.

 

India should join as member of the Inter-American Development Bank to enable Indian companies to participate in the projects of the Bank. 

In recent years, Indian companies have started making entry in projects in the region in sectors such as power transmission and renewable energy. For example, Kalpataru Power Transmission Ltd of Mumbai has got about a billion dollars of projects in the region including the single largest EPC contract of 431 million dollars In Chile. 

 

India should consider extending more lines of credit to the region. While China has given more than 150 billion dollars of credit to Latin America, India’s credit is not even one billion. The proposal of the Export Import bank of India to open an office in Sao Paulo within the year of 2024 is good news for Indian project and equipment exporters. 

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Latin America includes 10 countries in South America, 6 in Central America, 2 Spanish speaking Caribbean (Cuba and Dominican Republic) and Mexico