Context:
Over the last few years, India’s outreach to Latin America has increased significantly.
External affairs minister S. Jaishankar, who has visited Brazil, Argentina and Paraguay, is to visit Guyana and Colombia later this month.
Minister of state for external affairs Meenakshi Lekhi went on a visit to the region and met with senior officials in Cuba, Guatemala, El Salvador and Bolivia.
New Delhi has also hosted a number of regional leaders like the foreign ministers of Brazil, Argentina and Mexico for G20.
What has been the history of relations between India and Latin America?
After independence, India had a very limited diplomatic and economic reach. This forced India to prioritise ties with its neighbourhood and major Western powers.
However, in its first annual report in 1948, the external affairs ministry said its focus on Latin America was limited despite India’s interest in the region.
There were also domestic challenges with Latin American countries. Due to which, these two countries were not able to build their relations.
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Why is India now interested in Latin America?
Trade and Investment
During the last two decades, India’s trade with Latin American countries has grown substantially and its investments are diversified in sectors such as Information Technology (IT) and manufacturing.
Since 2000, trade has shot up by about 25% annually and is near $50 billion.
Moreover, the region has emerged as an important market for the Indian pharmaceutical and automobile industries.
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Diversification of Energy Dependencies
India’s desire to diversify its energy dependencies has pushed it towards Latin America.
Indian energy majors like ONGC are active in Colombia and Bharat Petroleum in Brazil.
Renewable energy is a key interest, too, with potential for cooperation in ethanol and green hydrogen.
The region is home to vital reserves of materials like copper and lithium, which will be crucial to India’s energy transition plans.
What are the challenges?
India’s trade with Latin America is negligible in comparison to China’s enormous $450 billion trading in that region. China is also a major lender to the region.
While other businesses are competing to take advantage of Latin America’s abundant natural resources, Indian businesses have lagged behind.
Hence, in order to overcome these challenges, India will need to step up its economic diplomacy and join regional economic institutions like the Inter-American Development Bank.
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Conclusion:
Overall, the Indian government has shown interest in diversifying India’s engagement in Latin America, and while India’s interest in Latin America is relatively new, the relationship has been on an upward trajectory.
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Why is India reaching out to Latin America?,Why is India reaching out to Latin America?
