The economic slowdown in China and the need of Latin countries for commercial diversification represent an opportunity for India, according to the coordinator of the Latin America-Asia Pacific Observatory, Ignacio Bartesaghi.
In an interview in New Delhi, the expert said that India’s economic relationship with Latin American countries is far below its potential, despite the fact that their economies are generally complementary.
A situation that could change with a new geopolitical scenario in which the Chinese economy has slowed to 7% and India has recently exceeded that figure after two years around 5%.
“Latin America has realized that it must seek new markets and not depend so much on China,” said the coordinator of Observatorio América Latina-Asia Pacífico, an initiative of the Latin American Integration Association, the Economic Commission for Latin America and the Caribbean of the United Nations and the Development Bank of Latin America.
Trade between India and Latin America has grown around 20% per year in the last decade to reach 42,000 million in 2013. India exports chemicals, drugs, textiles and automobile components to the American countries, while these sell to the Asian nation mainly oil and minerals such as copper.
Venezuela assumes almost half of exports to India thanks to oil, followed by Mexico and Colombia, while the main Indian markets are Brazil and Mexico.
For Bartesaghi, Latin America has the opportunity to improve its exports to India, with which it has a deficit, going from the trade of raw materials to agriculture and products with more added value.
Bartesaghi stressed that the relationship will advance more in bilateral terms of India with each country than through regional American organizations.
“The Free Trade Agreement between India and Mercosur is very limited, barely 400 products and will not be extended since on the one hand, Mercosur tries to close the trade agreement with the European Union and on the other Brazil and Argentina want to protect their industries”, explained Bartesaghi.
In this sense, the expert sees more possibilities in the Pacific Alliance formed by Chile, Colombia, Mexico and Peru with a commercial vocation with a view to the Asia-Pacific region.
Bartesaghi appreciated in the direct relations between India and the Latin American countries the future of the commercial relationship.
Thus, Chile and Peru have concluded trade agreements with the Asian giant and have taken the first steps towards the signing of free trade agreements.
In this sense, Brazil, partner of India of the BRICS countries, could play an important role, since it has common political interests with India, such as its inclusion in the UN Security Council.
Aartil aghari works as a journalist and content writer at Midway Chronicle. She also writes historical novels and writes books, and her personal website has lots of free resources for authors.