In a bid to ease hurdles and open up access to new frontiers, the government aims to enhance connectivity with Latin American (LatAm) countries — a move which will ease the long-standing demand of various nations. Trade volume could easily go up to $100 billion.
Sources in the government told FE, “At the recently concluded India-LAC summit organised by the MEA in Mexico, it was felt that South-South cooperation needs to be more vibrant and effective. Poor connectivity emerged as the biggest hindrance for investors — connectivity would go a long way in enhancing business between India and the LatAm and Caribbean region.”
“Trade and investments are below expectations in the region, while the shipment takes almost 60-90 days. And there are no direct flights,” sources added.
The region offers immense opportunities to Indian companies, especially in sectors such as energy, pharmaceuticals and agri business. Trade between India and Latin America is likely to double in the next five years from the current level of $46 billion, with direct shipping, air connectivity and visa-on-arrival, as well as free trade agreements, as some of the steps being taken to boost trade with the region.
While transportation costs and the lack of familiarity with each other’s markets were previously cited as the big impediments, the government is planning to improve connectivity to the region.
Experts say that the trade volume could easily go up to $ 100 billion if the leaders of both sides blend proactive diplomacy, address issues like enhancing connectivity and leverage multifarious win-win opportunities, especially in areas like energy, agriculture, nutritional processing, textiles, transport and IT & ITES.
Countries in the region, especially those landlocked like Bolivia, recognise that their connectivity too needs to be improved.
Seeking investments in developing Bolivia’s massive lithium deposits, which account for 60% of the world’s reserves, and keen on selling potassium and urea to India, minister for development planning René Orellana of Bolivia, told FE, “In an effort to improve connectivity, we are planning to improve our own infrastructure in Santa Cruz and creating a big business hub where big planes could land.”
Cuba, as pointed out by its ambassador, Oscar I Martínez Cordovés, has embarked on a rapid programme of modernisation and has in place special economic zones and technology.
Nicaragua is seeking Indian collaboration in the renewable energy space, which offers huge capacities for development of this alternate energy source. It is also looking at the Indian companies for mining too.
Countries like Haiti are anxious to see a balanced sharing of resources between the developed North and the developing and least developed countries of the South.
This is critical to pushing development in the growth-starved South, which is in urgent need of education, transfer of knowledge and technology, and use of great capacities in R&D for the socio-economic upliftment of its people.
Today, 60% of the current bilateral trade is in oil, hydrocarbons, minerals and agriculture commodities, but it is now moving into niche areas like pharmaceutical and IT services.