India-Latin America Relations: Harmony Across Hemispheres

Latin America and the Caribbean Region, also referred to as LAC, comprises 33 countries, from Mexico in the north to Chile in the southernmost tip of the South American continent, and islands surrounding the Atlantic and Pacific oceans. The population of this region is more than 660 million, with a total GDP of more than 6.81 trillion.

This is double the combined GDP of ASEAN states. The India-Latin America relations are based on shared development aspirations, trade and economic cooperation, and common multilateral groupings such as the United Nations, G77, and Non-Aligned Movement (NAM).

HISTORICAL CONTEXT

Latin America denotes the Americas where romance languages or languages derived from Latin, like Spanish, French, and Portuguese, are predominantly spoken. This is also because of the colonial era, which is also common to European rule in India. Both India and LAC states have seen rapid development and uprisings from poverty post 1947.

Mexico was amongst the first nation from the region to recognise India’s independence.

Historically, India - Latin American states have had common similarities, including geo-climatic conditions due to tropical climate. Latin America is a thriving region, with a very diverse area with different cultures, traditions, diversity of flora and fauna. The Caribbean region is known for its abundance of natural resources, especially maritime resources which is also a big opportunity for India. 

Post-independence, India and LAC countries were in disparate situations. The Latin American states were influenced by the American hegemony, whereas India initiated the Non-Aligned Movement (NAM) and later fostered relations with Soviet Union creating a wedge between the two. Historically, LAC states have also struggled with political instabilities and the influence of capitalist and socialist ideologies.

In 1968, Prime Minister Indira Gandhi visited the Latin American countries, which she termed a “voyage of discovery." This was a historic event in strengthening ties between India and LAC countries.

Image Credits: Rightful Owner

Following the decline of superpower influence in the region and the end of the Cold War era, dictatorship regimes like Fidel Castro in Cuba, the Samoza family in Nicaragua, and Augusto Pinochet in Chile declined to transition to regional integration and economic fundamentals in a democratic order, which led to the Brasilia Consensus. 

TRADE, PARTNERSHIPS, AND DIPLOMACY  

Relations between Brazil and India are unmatched in the LAC region, and they are regarded as the rising powers in the international order. Both countries cooperate and are associated with BRICS, IBSA, and other multilateral groupings to contemplate and cooperate in various areas.

In Latin America, Brazil was instrumental in guiding India in the negotiations for the India-MERCOSUR Preferential Trade Agreement (PTA) under which reciprocal tariff preferences are offered between the signatory countries.

India’s total trade with MERCOSUR countries in 2023 is estimated to be over US$50 billion. Both countries have signed a Social Security Agreement, which exempts expatriates from either country from paying social security contributions if they are already doing so in their home country. India is estimated to have invested US$6 billion in Brazil. International cooperation in key areas like the Global Biofuel Alliance, where potential remains high and significant. 

Mexico is the second largest economy in the region after Brazil, which has shown some interest in seeking a strategic partnership with India. Mexico ranks as the second largest trading partner of India in Latin America in FY 2022-23. In 2018, bilateral trade was valued at approximately US$10.15 billion.

In 2014, Mexico opened its oil sector to foreign participation. India’s then Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan, had expressed interest in purchasing more crude oil from Mexico and investing in its energy sector.

In line with this goal, India’s ONGC decided to participate in bidding for Mexico’s oil blocks. 

To boost trade relations between India and the Latin American and Caribbean regions, many developments have taken place recently, including Argentina, Bolivia, Paraguay, Saint Vincent and the Grenadines, Panama, El Salvador, and the Dominican Republic have signed the International Solar Alliance (ISA) agreement led by India. 

The South American region has a vast reserve of crude oil, iron ore, lithium, gold, silver, and more minerals. On 15 January 2024, the Ministry of Mines signed an agreement between India’s state-owned joint venture Khanij Bidesh India Ltd. (KABIL), and Argentina’s state-owned enterprise Catamarca Minera y Energética Sociedad del Estado (CAMYEN SE) at Catamarca to invest ₹200 crore to explore and develop five lithium mines in Argentina in a critical move to secure the mineral supply chain.

Argentina is part of the lithium triangle with Chile and Bolivia, which holds more than half of the world’s lithium resources. Lithium is a key component of batteries, electric vehicles, and energy storage systems. This agreement provides KABIL with exclusive rights for the exploration and commercial production of five lithium blocks covering an area of 15,703 hectares of land.

India’s EAM Dr. S. Jaishankar completed a historic visit to Latin America in April 2023. This marked the first bilateral visit by an Indian foreign minister to Guyana, Panama, Colombia, and the Dominican Republic.

The visit was accompanied by a business delegation emphasising on energy, mining, trade, pharmaceuticals, healthcare, and digital infrastructure. 

CONCLUSION

The multifaceted relationship between India and the Latin America and Caribbean (LAC) region stands as a testament to a shared developmental aspiration. From historical parallels to recent milestones, the strategic partnership continues to evolve with more economic cooperation and diplomatic engagement. The trajectory of India-LAC relations is composed for continued growth and mutual interests to address contemporary global challenges.

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BY ASHISH SURYAVANSHI

TEAM GEOSTRATA

info@thegeostrata.com