India – Latin America and Caribbean relations: Changing Landscapes, Emerging Agendas

India-Latin America Special Report 2019 BY Aparajita Gangopadhyay *

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The political dynamics of the demise of the Cold War led to the creation of new global identities. The inequitable distribution of economic resources worldwide had simultaneously created another axis of global identity—the countries of the ‘North’ versus the countries of the ‘South’.

It is within this backdrop of the rhetorical force of South-South Cooperation, where India’s relations with the countries of the Latin American and the Caribbean region began and have sustained for nearly four decades[1]. India has always enjoyed cordial relations with the countries in the region. Over the last few years, political engagement as well as trade and commerce between India and the countries of the region have intensified significantly. India not only shares common values of democracy and respect for human rights with LAC countries but also contributes to international order and development through memberships of several international organisations and has been working closely with GRULAC at the UN, G-77, NAM for nearly five decades. Of late, the region as also emerged as an important partner for India’s food security needs and in development of agriculture and agricultural processes. The countries of the region, especially Brazil, have been able to harness an alternate source of energy for fulfilling their energy needs. This has emerged as a source of great knowledge and expertise for India which is energy deficient. On the other hand, India’s expertise and experience in the sectors of tele-medicine, tele-education and e-governance, weather mapping etc. have been energetically sought after by the countries of the region.

India’s strategy for the LAC region is to enhance India’s political and economic engagement with all the 33 countries in the LAC region to strengthen this partnership. This also includes securing market access for Indian exports, diversification of its export basket, securing India’s investments and the interests of Indian businesses.

The liberalisation of India’s trade policy and the horizontal expansion of trade and investment are creating new incentives. The Indian government in 1997 introduced a new trade and commercial policy—FOCUS LAC vis-a-vis the region of Latin America and the Caribbean. The aim was to identify 8 countries from the region which would be targeted for a vigorous and sustained economic and trade initiatives. The programme was successful to a certain extent and for the first time introduced the possibility of Latin America and the Caribbean as potential markets for Indian goods and products.

For instance, trade between India and the region was mere US$ 2 billion in 2000 and it rose to US$ 36.3 billion in 2016-17. It was a 24 percent increase since the previous year. India has also signed the PTA with MERCOSUR and with Chile. Currently, PTA talks are being negotiated with Peru and Mexico. In terms of investment, since 2000, US$ 12 billion have been invested by Indian companies in the region. This investment has been largely to Argentina, Brazil and Mexico, the three large players from the region. Although, there has been a substantial rise in trade and commercial activities between India and the region, however for 2017-18 only 5 percent of all India’s trade is with the region of LAC. On the other hand, for the same period, trade with India only amounts to 1.8 percent of all Lac trade.

India has been touted in the recent past as a potential market for LAC products. Most of the LAC countries export food items that fulfil the food security need for India. In 2010, the Inter-American Development Bank’s report entitled: “India: Latin America’s Next Big Thing” and the CEPAL Report of 2011 entitled: “India and LAC: Opportunities and Challenges in Commercial Relations and Investment” have projected India to be a potential partner for the LAC countries. Most of the Indian investment has been in the IT, Pharma, agribusiness, mining, energy, manufacturing and oil sectors. These investments are not only strengthening the trade and commercial relations between the two sides, but also creating employment and partaking skills to the local populations. TCS, the IT giant from India has a global delivery hub in Montevideo and impacts skills and employs 900 local people. In Argentina, the 14 Indian companies present there include 7 IT companies which employ 7000 people there and all the firms in total employ nearly 30,000 people. In Bolivia, the Jindal Steel and Power invested US$ 2.3 billion in an iron ore mine in El Mutun, the biggest FDI in Bolivia and the largest by any Indian company in the region.

India’s partnership with Brazil in IBSA and the BRICS has also emphasized and strengthened the ‘South-South Cooperation’ idea, with both sides cooperating and at times coordinating their policies vis-a-vis various issues on the global agenda like at G-20 and G-4. The recent visits by high power Indian dignitaries like the Indian President Sri Ram Nath Kovind, the visit of the Vice-President of India, Sri Venkaiah Naidu and others to the various countries of the region as well as Mr. Modi’s visit to Brazil and Argentina have allowed the relationship to be re-focused on the positives and the potentials for the future. However, India’s defence cooperation with the LAC region has been lackadaisical, which is an area of future of cooperation.

Of late, India has been working towards improving the environment and keeping to its commitment to climate change. Both sides have reiterated their commitment to combating climate change and using sustainable development practises. Both LAC and India have called for increasing transparency of the cost of and for public investment. to reduce climate change. The recent initiative by India on maximising the use of solar energy, as well as using the latest technology that could be shared among the countries of LAC and India has been a welcome move. Many countries from the region, including Brazil have sent delegations to find common ground in technology sharing and best practices.

India and the LAC region could also use the structure of BRICS Bank/New Development Bank for climate change mitigation. As, along with the commitment to reduce consumption, here South-South Cooperation is also necessary. Public policy design will be the key in the articulation of competitiveness in a strategy that will include the challenges of climate change adaptation. Substantial political will be required for reversing the current trends. Participation of civil society and the private sector is also needed for the required incentivization. Moreover, to follow the SDGs and MDGs laid down by the UN there will be a need to synergise India-LAC cooperation in energy, agriculture and technology. Energy efficiency could be achieved by IT and clean technologies that comply with the ideas and policies laid down under sustainable practices. India is also trying to focus through a special prism on the islands of the Caribbean which are especially vulnerable to climate changes. The focus has to be on development and cooperation in all areas of bilateral relations between India and the Caribbean countries.

The different levels of interaction in the international arena, of late, have enhanced an urge to know each other and to the dissemination of knowledge about each other’s societies which impacts all aspects of social and political life. There is a close link between culture and politics in international relations. Culture plays an important role in the evolution of bilateral relation. It also gives a glimpse of social life which connects with the people and society of the other country. Identity is equally important in global engagement because it acts as a defining feature among multiple players and determines the nature of ties in the global arena.

India is a cultural giant. Its cultural and civilisational richness and variety has made it a power to reckon with. India has never pushed for hard power status around the world. Rather it is trying to harness its soft power image in various parts of the world including the LAC region. Public diplomacy is a major part of soft power. Whether it was the support from the LAC region to call June 21 as the International Yoga Day or the popularity of Indian spiritual leaders like Sri Sri Ravi Shankar or the practices of Ayurveda or even the impact of Bollywood. Indian cuisine or textiles are immensely popular in the LAC region. Indian spirituality and philosophy have always drawn people from the region to India. India can popularise its image in the region, especially since India always had friendly relations with the region with no historical baggage of the past. The popularity of the Brazilian telenovela Camioes das Indias speaks of this influence. This could be extended to popularising each other as feasible and sustainable tourist destinations. India could also market itself as one of the great destinations for medical tourism. The LAC region is also home to great civilisations and cultures and has been quite successful in maximising its culture to attract tourists around the world in enormous numbers. India could learn some of the best practises in this arena and use it for its own tourism sector. The potential is enormous and policy needs to be in place to implement some of these ideas.

The literary and epistemic engagement between India and LAC nations is not a new phenomenon. One key element in Latin American literature has been the representation of the Indian freedom struggle. In the recent past, various social movements in India have also been a dominant literary genre of Latin America. In addition, Latin American literature has also seen the cultural consolidation of the idea of the developing world. Indian Diaspora in the region is an asset and could be leveraged in strengthening India-LAC relations. The recent Pravasi Bharatiya Diwas and the Pravasi Bharatiya Sanman are worthwhile efforts in this direction. Also, linkages could be created between institutions of higher learning in India and of the LAC region which are insignificant, to say the least.

India-LAC relations have improved significantly in the last few decades. There have been more initiatives than before to cooperate between the two sides. However, the relationship continues to be largely transactional rather than deeper or wider. India and LAC have found certain common agendas to cooperate; however, on the whole, the relationship remains largely cordial. The reluctance on the part of India remains as it has been in the last seventy years: distances, languages, business practises, bureaucratic holdups, no direct air-links, while the LAC also seems equally lackadaisical when it comes to having a proactive India policy. They have also stated more often than not that India is using LAC region to fulfill its food and energy requirements which are contributing to a process of de-industrialisation in the region. The political volatility and the economic instability in the region have also added to the woes. India’s LAC policy has also been subservient to India’s Brazil policy which has tended to dominate India’s relations with the region. Lastly, the move to enter the LAC region has been largely through private enterprise and it is only in recent times that the government has shown interest in supporting these ventures.

Reference: [1] India’s diplomatic relations with the region began in the late 1940s.

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