WorldCity Business Magazine

India Courts Latin America

by WC

Front Lines: India’s exports to Latin America and the Caribbean are flourishing.

Although Indian shipments to Latin American countries are still low compared with China’s $25 billion in annual exports to the region, they skyrocketed to $3.2 billion in 2005. A decade earlier, they were just $500 million and that was a big leap from India’s $124 million in exports in 1992. The growth comes, in part, as a result of focused export programs to the region.

The bulk of the exports were textiles, yarn, chemicals, pharmaceuticals and raw materials.

To Brazil alone, India exported $1.2 billion-worth of goods in 2005 compared with $240 million a decade ago. During the same period, India shipped $957 million in goods to Mexico and $269 million to Argentina. Both were nearly tenfold increases compared with 1995 figures.

In addition, exports to Colombia soared to $248 million in 2005 while those to Venezuela reached nearly $125 million. A decade ago, Indian exported only $1 million-worth of goods to each country.

While India is profiting from business opportunities in the Western Hemisphere, Latin American companies have been slow to capitalize on opportunities in the country with 1.3 billion people, or 15 percent of the world’s population.

“Exports from Latin America to India are still miniscule,” said Ravi Kumar, the Indian-born general manager of Jaguar Overseas, estimating that only 1.5 percent of all Latin American exports make their way to India.

“These countries could be taking advantage of a 300-million-person middle-class consumer market. We have a middle class as large as the United States’ population,” Kumar said at the Miami Herald Americas Conference in September.

Eddy Martnez Manzueta, secretary of state for the Dominican Republic, said Indian exports to the Dominican Republic jumped to $5 million last year. During the 1990s, they were negligible.

Martnez Manzueta has visited India three times in the past year, including a trip to open his country’s embassy in New Delhi. He predicted that India could one day become Latin America’s best new trade partner.

“The Indian model is best suited for Latin American companies,” said Martinez, explaining that India’s democratic tradition has resulted in more corporate transparency than in China.

He said India is a promising export market for ethanol-producing countries such as Brazil, Colombia and the Dominican Republic.