Highlighting India’s growing strategic engagement with South America, Dr. K.M. Praphullachandra Sharma, Joint Secretary (South America), Ministry of External Affairs, outlined New Delhi’s multi-dimensional approach to the region at the Indo–South America Trade & Investment Conclave, organised by PHD Chamber of Commerce and Industry at PHD House.
Addressing diplomats, industry leaders and global stakeholders, Dr. Sharma emphasised that India’s engagement with South America is no longer transactional, but increasingly strategic, structured and future-oriented.
“At the government level, when we engage with any country or region, we work through clearly defined verticals,” he said. “Political engagement is as critical as trade, investment or people-to-people ties, because it is political trust that ultimately enables everything else.”
Political Engagement as the Foundation
Dr. Sharma noted a sharp intensification of high-level political exchanges over the past year. India’s Prime Minister has held bilateral meetings with nine to ten South American leaders, alongside engagements with several others in multilateral settings. Foreign minister-level interactions and Joint Commission Meetings—India’s highest institutional dialogue mechanism—have further strengthened bilateral frameworks.
Illustrating the depth of engagement, he remarked that some embassies have hosted nearly 100 official delegations in the past year and a half, reflecting growing mutual interest across sectors.
Trade Below Potential, Despite Strong Momentum
Turning to economic ties, Dr. Sharma stated that India–Latin America and Caribbean (LAC) trade currently stands at approximately USD 40 billion, encompassing both imports and exports. While trade volumes are steadily increasing, he acknowledged that they remain well below potential.
“Distance, institutional bottlenecks, language barriers and differences in business processes are among the constraints on both sides,” he said, adding that improving mutual familiarity with regulatory and commercial ecosystems is essential.
People-to-People Ties and Connectivity
Beyond trade, Dr. Sharma underlined the importance of people-to-people engagement, including tourism, academic exchanges and professional mobility. Visa facilitation and regulatory reforms, he said, would be key enablers of closer ties.
Connectivity remains a structural challenge, with travel times to South America ranging between 24 and 36 hours. While direct flights are currently not feasible due to aircraft limitations, the Government of India is working with airlines and partner countries to optimise one-stop connectivity via Europe or Africa.
“Bringing people together is essential,” he stressed. “Connectivity ultimately creates the urge for industries and individuals to work with each other.”
Trade Architecture: PTAs, FTAs and CEPAs
Dr. Sharma provided a comprehensive overview of India’s evolving trade architecture with the region. India currently has a Preferential Trade Agreement (PTA) with MERCOSUR, the South American bloc comprising Brazil, Argentina, Uruguay and Paraguay, with Bolivia as a recent member.
The existing PTA covers around 450 tariff lines, which he described as insufficient to drive substantial trade growth. Brazil alone accounts for 72–75 percent of India’s trade with MERCOSUR, followed by Argentina.
“We are now undertaking a joint study to significantly expand the PTA—identifying complementary sectors as well as areas of competing interest,” he said.
With Chile, negotiations on a Comprehensive Economic Partnership Agreement (CEPA) are in advanced stages. “Hopefully, in the coming weeks, we should reach an advanced level of conclusion,” Dr. Sharma noted, underscoring Chile’s importance for India’s trade and investment ambitions.
India is also engaged in FTA negotiations with Peru, where eight rounds of talks have already been completed, with the intention to conclude discussions at the earliest.
Critical Minerals, Digital Public Infrastructure and Technology
A key thrust of India’s engagement with South America lies in critical minerals, digital cooperation and advanced technologies. Dr. Sharma pointed out that while India’s economy is increasingly dependent on critical minerals, South America is richly endowed with them.
“From the moment we wake up in the morning till the end of the day, everything we use is linked to critical minerals,” he said. “South America has this natural advantage, but it must be harnessed sustainably.”
India is actively exploring partnerships in lithium, copper, silver and gold, through joint ventures, bidding mechanisms and value-added investments, particularly in battery technologies and clean energy transitions.
Equally significant is collaboration in Digital Public Infrastructure (DPI), including UPI-based platforms, startups, fintech, space cooperation, nuclear energy, and emerging technologies.
“Unless we orient ourselves towards digital and tech-driven economies, trade and engagement will remain sub-optimal,” Dr. Sharma cautioned.
A Moment to ‘Shift Gears’
Concluding his address, Dr. Sharma observed that both India and South America are at an inflection point.
“As governments, we now need to shift gears and work closely with industry in areas of mutual benefit,” he said. Indian companies are already active in South America across various sectors, including pharmaceuticals, automobiles, engineering goods, and digital solutions, and these engagements are now poised for scaling up.
“The Government of India is looking more and more towards South America—and South America, in turn, is looking increasingly towards India,” he noted, citing market complementarities in agriculture, minerals, manufacturing and technology.
He invited ambassadors and country representatives present at the conclave to outline specific investment opportunities, reiterating that public–private collaboration will be central to the next phase of India–South America relations.
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