At a time when demand for Indian goods in developed countries is declining, the country is trying to deepen trade relationships with Latin American countries to explore alternative growth frontiers.
Commerce secretary Rahul Khullar will lead a business delegation of engineering companies to Colombia and Panama on a five-day visit from Monday, “with an eye to explore the possibility of bilateral trade agreements” with the Latin American nations and to encourage India’s trade and investment in the region, a commerce ministry official said, requesting anonymity.
“Colombia and Panama are crucial for us as we are aiming to increase our trade ties with the Andean Community of Latin American countries,” the official said.
The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru.
India already has a preferential trade agreement (PTA) with the Mercosur bloc comprising Brazil, Argentina, Uruguay and Paraguay that came into effect in 2.009 and covers around 900 products.
A similar trade pact with Chile has been effective since 2007.
The official said Panama is a great place to have access to the Sistema para la Integración Centroamericana, or the System for the Central American Integration (Sica), region.
Apart from Panama, Sica includes six other countries—Belize, Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador and the Dominican Republic.
Exports to Latin American countries rose 72.5% in 2010-11 to $10.7 billion (`49,327 crore), according to latest commerce ministry data.
However, India shares a trade deficit of $3.2 billion with the continent, with imports growing at 34% to $14 billion during the same year.
The official said apart from growing trade relations, Latin America has been on the radar of Indian investors with many Indian multinationals making their foray into the continent.
Among major firms present in Latin America are Tata Motors Ltd (automobiles), Tata Consultancy Services Ltd (information technology), Dr Reddy’s Laboratories Ltd (pharma), United Phosphorus Ltd (agrochemicals), Shree Renuka Sugars Ltd, Havells Sylvania Germany GmbH (lighting equipment), Videocon Industries Ltd (television) and ONGC Videsh Ltd (oil).
There’s great demand for Indian engineering and textiles products in Latin America, said another commerce ministry official.
“There is a postive affiliation for our products,” he said, requesting anonymity. “The markets are ideal for medium-range prducts.”
The second official said the lack of direct shipping lines to these countries substantially increases freight costs for Indian exporters as they have to route their products through Johannesburg in South Africa.
“We are in talks with Shipping Corp. of India (Ltd) to establish direct shipping lines with such counties,” the official added.
With the developed world going through a phase of crisis, India has to increasingly expand to new markets such as Latin Amrica, said Abhijit Das, head of the Centre for WTO Studies.
“We are already considering deepening trade ties with Brazil and expanding the scope of the India-Mercosur PTA.
The developing countries in Latin America can provide us new growth opportunities even ahead of African countries,” he added.
However, he said it should not be an either-or situation between African and Latin American countries for expanding our trade ties.
Commerce secretary Rahul Khullar will lead a business delegation of engineering companies to Colombia and Panama on a five-day visit from Monday, “with an eye to explore the possibility of bilateral trade agreements” with the Latin American nations and to encourage India’s trade and investment in the region, a commerce ministry official said, requesting anonymity.
“Colombia and Panama are crucial for us as we are aiming to increase our trade ties with the Andean Community of Latin American countries,” the official said.
The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru.
India already has a preferential trade agreement (PTA) with the Mercosur bloc comprising Brazil, Argentina, Uruguay and Paraguay that came into effect in 2.009 and covers around 900 products.
A similar trade pact with Chile has been effective since 2007.
The official said Panama is a great place to have access to the Sistema para la Integración Centroamericana, or the System for the Central American Integration (Sica), region.
Apart from Panama, Sica includes six other countries—Belize, Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador and the Dominican Republic.
Exports to Latin American countries rose 72.5% in 2010-11 to $10.7 billion (`49,327 crore), according to latest commerce ministry data.
However, India shares a trade deficit of $3.2 billion with the continent, with imports growing at 34% to $14 billion during the same year.
The official said apart from growing trade relations, Latin America has been on the radar of Indian investors with many Indian multinationals making their foray into the continent.
Among major firms present in Latin America are Tata Motors Ltd (automobiles), Tata Consultancy Services Ltd (information technology), Dr Reddy’s Laboratories Ltd (pharma), United Phosphorus Ltd (agrochemicals), Shree Renuka Sugars Ltd, Havells Sylvania Germany GmbH (lighting equipment), Videocon Industries Ltd (television) and ONGC Videsh Ltd (oil).
There’s great demand for Indian engineering and textiles products in Latin America, said another commerce ministry official.
“There is a postive affiliation for our products,” he said, requesting anonymity. “The markets are ideal for medium-range prducts.”
The second official said the lack of direct shipping lines to these countries substantially increases freight costs for Indian exporters as they have to route their products through Johannesburg in South Africa.
“We are in talks with Shipping Corp. of India (Ltd) to establish direct shipping lines with such counties,” the official added.
With the developed world going through a phase of crisis, India has to increasingly expand to new markets such as Latin Amrica, said Abhijit Das, head of the Centre for WTO Studies.
“We are already considering deepening trade ties with Brazil and expanding the scope of the India-Mercosur PTA.
The developing countries in Latin America can provide us new growth opportunities even ahead of African countries,” he added.
However, he said it should not be an either-or situation between African and Latin American countries for expanding our trade ties.
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