To some, COVID-19 marks an interregnum, albeit, an extended one at that; to others, it constitutes nothing short of a seminal rupture, a break from the erstwhile, and migration to a new orbit, where not just policy-compacts, but the wider canvass of strategic-calculus and statecraft, are revisited. Like many matters at crossroads, in the wake of the pandemic, India-Latin America trade and investment relations, too, beg the question, as to whether they will find spur or meet with further bedevilment, going forward?
An engagement, long blighted by attributes of geographical distance, cultural-linguistic divergence and normative disconnect, has witnessed meaningful resurrection in recent decades, at the altar of transactional commercialised exchanges, anchored in the trade of strategic natural commodities and narrowly defined product-lines of capital goods and industrial intermediates manufacture, going back and forth, consequently witnessing a twentyfold increase in trade volumes from a minuscule base, over three decades. (Mehta, 2019) However, as the empirical record of such transactionalism proves to be capricious and stagnating, owing to the vagaries and vicissitudes of global commodity price-oscillations, it’s often wondered, as to what’s holding back the forging of a comprehensive and resplendent trade and investment partnership? After all, as peer emerging economies and fellow developing societies, both sides suffuse in similar aspirations of fostering ameliorating conditions of sustenance which require growth and development strategies, underpinned by mediums of sound financing, beneficent industrial and entrepreneurial upscale, and technology-partake, for autonomous societal capacitation. Yet, it’s true that, by circumstances and design, India and Latin America have grappled with this challenge, in no small measure due to their established moorings to alternative economic epicentres (Latin American schmooze with US, Europe and China, whilst Indian focus on East and South-East Asian economies).
However, as either finds itself arguably on the margins of the mainstream multilateral liberalised trade and investment regimes, owing to infirmities in manufacturing robustness, a dearth in infrastructural competitiveness, and circumscribed technological prowess, it proffers an opportunity for India and Latin America, to segue into a potentially chiming relationship, wherein commercial exchanges transcend traditional notions of mercantilist merchandise flows alone, and qualitatively embrace the commercialisation of synergies, in five strategic domains of collaboration, viz., extractives and food security compact (energy, mining, agri-processing), sustainable industrialisation and resilient manufacturing (MSMEs and GVCs/GSCs integration), sovereign capacitation (defence hardware and space cooperation), social infrastructure build (health and education), societal empowerment (entrepreneurial skills and technology-sharing). (Maharaj, 2017) With either side harbouring the wherewithal to complement the other, across these aforesaid five realms, it’s imperative to exhort the prioritized instituting and institutionalisation of substantive intertwining, at the plausible G2G (government) and B2B (business) levels, but more so, at the E2E (entrepreneur) and T2T (technology) levels too, all of which beholds productive opportunities, towards crafting an enduring, tangible, and osmotic trade-investment engagement.
The energy and minerals-metals space shall not just remain a mainstay, but also bedrock engagement for the foreseeable future, given the convenient fit between Latin America’s colonial styled modes of production wedded to its verdant resources endowment, and India’s voracious appetite in fuelling its growth-aspirational economy, with prognosis for abiding upswing. However, at a time when Latin America remains disconcerted by the predatory ensnare of its resources at the hands of China, yet has to grudgingly go along with the drift owing to its over-reliant exports to China, India, through its bigwigs in the public and private sector can offer an alternative template to the singular ‘extraction and ship-out’ model in vogue, at least in the sourcing of futuristic resources such as Lithium. During his sojourn to the Lithium Triangle countries of Bolivia, Chile and Argentina, during early 2019, the Indian President suggested to Bolivia in particular, that, in addition to perfunctory extraction, joint-venturing in processed-utilization of Lithium deposits, towards harnessing the full extent of value addition in lithium battery and cell production systems, would enable Bolivia, to accrue state revenue alright, but also create a steady stream of functional employment, and foster accosting domestic capacitation based development. All this, as such co-production and joint-development of lithium and its derivatives, would lend an impetus to India’s emergent E-mobility and E-storage dimensions, undergirding its Electric Vehicles sector. (Mishra, 2019) Similarly, brimming opportunities beckon in agri-processing across Latin America, reposing grasslands spanning a landmass five times the size of India, with only half the latter’s population, hence competent to address New Delhi’s food security concerns and attendant investment avenues. (Gautam, 2019)
Micro Small and Medium Enterprises (MSMEs), are the lifeline in each other’s economic milieus, creating the largest subsistence on jobs, and accounting for a significant share in GDP and national income of domestic economies. Yet, they experience travails not just in contending with the constraining challenges of factor-productivity attributes of land, capital and labour, but equally for access to affordable technology and viable markets. At a time when the global overdependence on China for logistical components and industrial intermediates has turned pyrrhic, India and Latin America must join forces to contribute to the repurposing of regional and global supply and value chains in logistics, by identifying the sectors and products of industrial complementarity and bringing their respective capacities across entrepreneurial instincts and technological injection to bear, in leading their economies up the value chain and pecking-order of supply criticality in logistical industrial infrastructure.
Defence and Space sectors are often viewed, as inscrutable segments of exceptional higher-ordering, which do not get perceived as building blocks to a cogent trading and investment relationship. While India is not a prima donna defence manufacturer and sentient of the fact that US, Russian and Chinese hardware are sourced within the region, New Delhi through its ramped-up emphasis on Make-in-India defence can nevertheless claim to offer viable defence equipment and platforms, at least to those countries, endeavouring for diversification of imports, and with curated requirements for high altitude warfare, low-intensity asymmetric violence involving hand-to-hand street combat, electronic communication equipment, amphibious surface vessels production and maintenance, etc. (Siddiqui, 2020) Similarly, the pedigreed Indian Space Research Organization (ISRO) has carved up an enviable niche for itself in the civilian space research and installations domain, something which many Latin American countries, keen to launch their own satellites, but either lacking the expertise or the wherewithal, and possibly wary of allowing the Chinese with their accompanying apprehensions of espionage to commission such activities on their behalf, may seek an out and out commercial operation, involving everything from launch of satellites to communications services and the ilk. (Shidore, 2013)
Healthcare has been a telegenic area of trade and investment vista in mutual ties, whose epochal role stands reinforced, in post-pandemic times to unfold. Indian pharmaceutical titans have been indulgent on the region’s landscape for close to two decades and covet the handy margins business from the region, such that the region sources close to a billion dollars of generic drugs from the proverbial “pharmacy of the world.” (Jha, 2019) The episodic solidarity of India making Hydroxychloroquine readily available to Brazil and others, who solicited it, at the apogee of the COVID-19 crisis, notwithstanding, the allopathic strand in which India enjoys incontrovertible proficiency, must be complemented by the commercial dissemination of Ayurveda and other traditional Indian medicinal therapies that chime with the practice of Yoga, which as it is, remains exalted in the region. At a time when holistic wellbeing is being appreciated for its merits in a chastening post-pandemic world, one need not be apologetic about promoting the increased insertion of Indian traditional medicine to penetrate Latin American markets, rather be an apologist to the contributing cause of overall wellness. A similar case may be made for the field of education, wherein India can leverage its remarkable strides in higher education particularly in the technical and technological specialisation fields and disciplines, as also in having its varied private educational institutes and firms disseminate linguistics based skills and training, particularly English, through lucrative business prospects.
If India and Latin America have to pivot their trade and investment equations beyond the remit of a few commodities and manufactured products, and from the Indian standpoint, beyond the promenade of a few select countries, it has to also look beyond the proverbially suggested low hanging fruit of Free and Preferential Trading Agreements, arrangements, which empirical data has shown, are elusive early-harvests, in the face of deeply entrenched vested interests preferring the risk-averse status quo, coupled with lack of traction on meaningful trade facilitation measures and regulatory frameworks to safeguard each other’s investments across landscapes, which, despite increased business sensitization, still remain shrouded in enigma. However, this goes to the heart of whether Latin American sovereigns and India, would opt for the cop-out and hunker down into insular hidebound policies of populist protectionism in support of narrow vested interests and inefficient entities and processes, or would consciously choose to harness opportunities for regional and global partnerships, to reinforce national core-competencies and forage for new breakout markets.