Quick Overview
India has deepened its trade and strategic engagement with Latin America, completing trade talks with Peru and CEPA negotiations with Chile. Key areas include trade diversification, energy and mineral security, and South-South cooperation. Challenges include connectivity, competition from China, and limited regional engagement. Strategic measures include improving logistics, political dialogue, and technology collaboration.
India-Latin America Trade Engagement
India recently concluded the 9th round of trade talks with Peru and the 3rd round of CEPA negotiations with Chile, reinforcing its economic and strategic presence in the Latin America–Caribbean (LAC) region.
India-Peru Cooperation
Trade & Economy: Bilateral trade grew from USD 66 million (2003) to USD 3.68 billion (2023). India imports gold and copper from Peru. Talks focused on trade in goods/services, rules of origin, technical barriers, and critical minerals.
Development Partnership: India provided medical support during emergencies, established the India–Peru Centre for Excellence in IT (2015), and extended financial aid for cultural and educational initiatives.
India-Chile Relations
Trade & Economy: Bilateral trade increased from USD 1.54 billion (2020) to USD 3.84 billion (2024). India exports motor vehicles, pharmaceuticals, textiles, and electrical machinery, while importing copper, pulp, fruits, and minerals.
Agreements: The Preferential Trade Agreement (PTA) and Double Taxation Avoidance Agreement (DTAA) have enhanced market access, investment confidence, and ease of doing business.
Significance of India-Latin America Relations
Trade Diversification: Trade reached USD 35.7 billion in 2023–24.
Energy & Minerals: Latin America provides 15–20% of India’s crude oil. The Lithium Triangle (Chile, Argentina, Bolivia) is vital for EV and clean energy sectors.
Food Security: India imports soy, edible oils, and pulses, stabilizing domestic prices.
Geopolitical Alignment: Collaboration in G20, BRICS, and IBSA enhances global leadership.
Climate Cooperation: Initiatives like the USD 140 million Line of Credit to CARICOM and participation in ISA strengthen climate diplomacy.
Challenges
Geographic distance and poor connectivity increase trade costs.
Engagement is concentrated in a few countries; smaller economies remain under-engaged.
Competition from China, which dominates regional trade and infrastructure.
Weak regional integration and limited multilateral engagement.
Strengthening India-LAC Relations
Improve logistics and explore dedicated maritime/air corridors.
Enhance political dialogue through an India–LAC Dialogue Mechanism.
Expand trade agreements and simplify regulatory procedures.
Foster technology collaboration via Innovation Hubs and South–South frameworks.
Engage the Indian diaspora and private sector as cultural and economic bridges.
Conclusion
Latin America is a strategic partner supporting India’s energy, mineral, and food security goals. Strengthening India–LAC ties is crucial for multipolar global leadership and sustainable South–South cooperation.
Drishti Mains Question:
Assess India’s trade and investment performance in Latin America and suggest sector-specific measures to increase bilateral flows and technology cooperation.
FAQs
Which Latin American countries form the Lithium Triangle?
Chile, Argentina, Bolivia.Which countries supply most of India’s crude oil from Latin America?
Brazil, Mexico, Venezuela.What is MERCOSUR?
A Latin American trade bloc headquartered in Uruguay.
CLAT/Exam Relevance Summary
GS Paper 2: Bilateral trade agreements, India’s foreign policy, South-South cooperation.
GS Paper 3: Trade diversification, energy and mineral security, renewable energy collaboration.
Prelims: Key countries, PTAs, DTAAs, Lithium Triangle, MERCOSUR.
Mains: Analyze India-Latin America trade performance, identify sectoral opportunities, evaluate geopolitical implications.