The Global South is not just a neighbour. It is our shared future. Economic cooperation with these countries is a matter of strategy and not merely a necessity in forging a resilient, equitable, and sustainable world order.
India’s trade and economic diplomacy with the nations in the Global South has undergone momentous changes during the last few decades. In today’s context, multilateral relationships based on shared histories, common challenges, and mutual development goals have become very crucial, especially in light of the shifting global power dynamics. Global South refers to wide geographic delineation yet constitutes an economic voice of equity, sustainable development, and south-south cooperation. For two decades now, India has been at the forefront in harmoniously shaping the future of South-South cooperation—both practical and principled.
As opposed to the historical reality of Global South countries being marginalized in the wider economic and political context, the recent few decades have seen these countries emerge as critical players in international trade, development cooperation, and global governance. They no longer remain recipients of aid but are active participants in shaping the global economy.
The Global South accounts for more than 70% of the world’s population and almost 50% of the global GDP in terms of purchasing power parity. By 2022, South-South trade had reached more than 30% of global trade, a remarkable rise from less than 10% in 1990. This is also an indication of the growing economic interdependence among developing countries.
Through forums such as the India-Africa Forum, BRICS, G77, and G20, India has been an early mover in playing a leading role in advocating for collective economic development, expanding trade, securing resources, and accessing emerging consumer markets. India has thus intuitively been farsighted in its strategy of building trade partnerships with Global South countries. A 2021 report by the United Nations Conference on Trade and Development disclosed that, over the last ten years, trade between developing countries had grown almost twice as fast as that with the developed world.
Global South Matters for Trade and Growth
Full of economic and cultural potential, the Global South holds a majority of the world’s population, a significant share of the world’s natural resources, and markets with untapped consumer bases. Although India’s engagement in this region, through trade agreements and economic cooperation, is based on mutual economic interests and synergies, it has helped diversify trade partners in not only reducing its dependence on traditional routes but also creating new avenues for Indian businesses.
India’s Increasing Influence in Africa: Trade, Energy, and Development
Africa is the world’s fastest-growing economy and has one of the richest natural resource repositories. The continent has become the cornerstone of India’s Global South trade strategy. India-Africa trade cooperation has made Africa its prime focus, with trade between the two partners skyrocketing to over $89 billion in 2021 and it will only be soaring in the upcoming years. The relationship that India shares with Africa will not only be commercial because it has spread across health, education, energy, technology, and infrastructure development. India has contributed to Africa’s healthcare systems by exporting low-cost generic medicines, which have improved access to essential healthcare services across the continent. India has also provided telemedicine and e-education facilities to several African countries through the Pan-African e-Network project. Anecdotally, 2014 was the year that Ebola-hit West Africa and India played a pivotal role in bringing humanitarian aid and medical supplies to the affected countries. In doing so, it further cemented India’s role as a partner in times of crisis and deepened the understanding that partnerships with the Global South are about shared values of solidarity rather than mere transactional trade.
With an outlook to increase bilateral trade to $150 billion by 2025, India has diversified its investments into pharmaceuticals, healthcare, technology, and renewable energy sectors in Africa. While the oil and gas imports from Nigeria and Angola have significantly increased, there are major strides made in addressing energy security through renewable energy cooperation. One example is India’s International Solar Alliance launched in 2015, which has so far expanded to more than 30 African countries to build solar infrastructure. By 2023, India had spent over $2 billion in solar power projects in Africa, starting with Kenya, Ethiopia, and Tanzania. These initiatives strengthen India’s energy security and, at the same time, enable it to meet climate action goals.
Egypt has become one of India’s largest trading partners in North Africa. The Suez Canal Economic Zone, where several Indian companies have invested, provides India with access to European markets. The two nations have expanded cooperation in defence, with the growing trade in security technology and defence equipment and agriculture, focusing on crop development and food security.
In terms of infrastructure development, India has granted over $12 billion in lines of credit to African nations to modernize their roads, railways, and airports. The technical training and capacity-building programs extended by India through its diplomacy reach more than 30,000 African professionals in all fields, from healthcare to information technology.
Latin America: A Promising Trade Partner
While Africa has remained India’s number one target engagement with the Global South, Latin America is equally crucial. In fact, bilateral trade with Latin America went from $3 billion in 2000 to more than $42 billion in 2021. There is tremendous natural wealth potential in Latin America, which consists of oil, minerals, and agricultural produce, attracting considerable Indian investments.
In recent times, India has broadened its trade ties substantially with Brazil, Venezuela, Argentina, and other Latin American nations. Energy partnerships with Venezuela and Brazil have been boosted by increased imports of crude oil for the country’s energy security and diversified energy mix.
The case of India and Brazil is more emblematic of South-South cooperation, as both, being founding members, have strongly championed reforms in the international governance architecture, demanding more representation of developing nations within institutions such as the United Nations and the IMF. As a BRICS nation, Brazil is one of the most important countries bringing significant interest in mutual fields, including agriculture, energy, and technology. With a big push on biofuels, pharmaceuticals, and other agricultural products, India-Latin America trade collectively has risen to $11 billion by 2021.
Mexico is one of India’s most important trading partners, and its abundant oil and gas resources have further piqued India’s interest given its advantageous location as a gateway to the Americas. Furthermore, Mexico’s sophisticated automotive and electronics manufacturing skills complement India’s goals to expand its manufacturing sector through technological and innovative alliances.
Southeast Asia: A Strategic Pivot
Southeast Asia has been an important focus area in India’s foreign and trade policy, and ASEAN countries are an important subset of India’s Act East Policy. The trade figures between India and ASEAN reached $110 billion by 2022, where the bloc is one of India’s largest trading partners. The Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India has over the years proliferated to include free trade in goods, services, and investments. The ASEAN-Indian Free Trade Area (AIFTA) has played an important part in facilitating trade across industries in electronics, pharmaceuticals, textiles, and engineering products.
Notably, India has also paid importance to digital connectivity and technology transfer with its ASEAN partners. To date, India’s IT companies have successfully expanded their footprint across the Southeast Asian region, which added to this region’s rapidly growing digital economy. This cooperation continues as India increases its investments in technology, artificial intelligence, and fintech sectors.
The India-Myanmar-Thailand Trilateral Highway is an important regional infrastructure project that supports the Indian effort to deepen economic integration with Southeast Asia. Once complete, the highway will be able to not only boost trade but also cement cultural and people ties between India and its Southeast Asian neighbours.
GCC (Gulf Cooperation Council): Key Energy and Trade Partners
The GCC, which consists of Saudi Arabia, the UAE (United Arab Emirates), Qatar, Oman, Bahrain, and Kuwait, is essential to India’s economic interests and commerce with a whopping trade figure of over $154 billion in 2022. Saudi Arabia, the second-largest oil exporter to India, is crucial to energy security and collaborates on infrastructure, technology, and renewable energy as part of its Vision 2030. UAE signed the CEPA (Comprehensive Economic Partnership Agreement) with India in 2022 with the goal of achieving $100 billion in trade by 2027. India’s exports throughout MENA are now more widely available due to this agreement, particularly in industries like electronics, jewellery, and textiles.
Multilateral platforms and diplomatic channels for economic growth
India’s strategy to engage with the Global South is reflected in its leadership on various multilateral platforms such as BRICS, IORA, G77, and G20. Using these forums, the country has consistently brought reforms in global governance and amplified the voices of developing countries within global institutions.
India’s leadership in BRICS has shaped the group’s economic agenda. The New Development Bank (NDB), established by BRICS countries in 2014, has financed over $30 billion in infrastructure and development work in Global South countries. NDB announced new projects in renewable energy, urban infrastructure, and transport across Africa, Asia, and Latin America as an alternative to the geo-financial architecture dominated by the West. BRICS has also helped India to collaborate with Brazil, South Africa, and China on infrastructure projects, digital technology, and financial inclusion.
India’s leadership and presidency (in 2023) at the G20 has also provided an opportunity for it to vocalize concerns and drive a solution-centric approach in climate finance, clean energy, food security, and technology access in an equitable manner. During the G20 Summits, India called for increased cooperation on health, education, and digital inclusion that warrants more sustainable and inclusive economic growth.
Importantly, deepening economic ties with the Global South requires diplomatic channels, and India has been at the forefront of advocating and channelling resources for reforms through multilateral engagements and forums that now offer wider participation in institutions such as the WTO, IMF, and the United Nations. Reducing trade barriers and ensuring unbridled market access, as well as the developmental needs of Global South nations, find a place in the ingenuity of a more equitable trading system promoted by India on the world stage.
At the same time, membership in IORA (Indian Ocean Rim Association) represents an important component of India’s maritime strategy to engage with the Global South. The Indian Ocean region is a critical hub for international trade, with major shipping routes passing through it. Greater cooperation on maritime security, trade, and blue economy initiatives has been achieved by engaging with IORA countries such as South Africa, Kenya, and Indonesia.
India’s Global South Vision and a Shared Future
As India recognizes that trade is an indispensable means of achieving the SDGs, its negotiations have also put environmental sustainability and climate action at the centre of its trade engagements. In its recent trade talks with African and Latin American nations, India has advocated the inclusion of clauses for green technologies, sustainable agriculture, and renewable energy. These interlinkages create pathways to address global climate issues and sustainability in some of the most vulnerable zones. To this effect, India-Global South trade agreements and economic partnerships are more than economic transactions and reflect a broader consensus for a fairer and more balanced global order.
As in all diplomatic relationships, challenges persist in otherwise robust Global South engagements. Trade imbalances, bureaucratic hurdles, and differing regulatory frameworks pose a threat to the scope of possible partnerships. On top of that, India’s geopolitical grandstanding with China, which is similarly courting the Global South, presents a continuous obstacle.
Although India’s engagement with Global South reflects both strategic alignment and equity, it is also a tactical manoeuvre to gain leverage in a highly competitive multipolar world. India diversifies supply chains and reduces dependency on the more traditional allies through trade partnerships, especially energy-rich nations like Saudi Arabia and the UAE. It accesses critical natural resources and keeps resource prices in check by focusing on rapidly growing African and Latin American markets. This outreach is further bolstered by India’s leadership in multilateral platforms such as BRICS and G20, which it uses to canvass reform in global governance. India is genuinely committed to South-South cooperation, but in its pursuit of it, it often closely aligns this with a bigger agenda of asserting influence in the face of rivalries, specifically with China and Pakistan.
The coming years appear to be powered by India’s diplomatic foresight, economic pragmatism and commitment to environmental sustainability. With its influence on multilateral platforms and deepening bilateral trade partnerships, India shall continue to play a pivotal role in shaping the future. In this way, it is strengthening its own position in the global economy as well as striving to build shared progress.
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