The recent visit of Prime Minister Narendra Modi to Argentina for the G20 summit briefly brought focus on India’s engagement with the Latin America (LA), a region that remains on the backwaters of India’s diplomacy. India-LA story is a work in progress but is likely to be a missed opportunity in the absence of political and diplomatic push from New Delhi to tap the unrealised potential of this relationship.
Despite being distant lands, India and Latin America have had similar historical experiences. Both were victims of colonialism and adopted socialist policies after their independence. Through groupings like the Non-Alignment Movement and the G-77, the two sides came together under the aegis of south-south cooperation during the Cold War. They faced similar economic issues, forcing them to open their economies to outside world. India and Latin America are also seen as potential economic powerhouses with immense potential for investments, signalling their simultaneous economic rise.
Latin America looks up to India in times when US President Donald Trump does not hold the region in high regard due to problems of immigration and drugs in the US.
China’s predatory policies have also caused concerns in the region while the European Union is witnessing a nationalist wave. In such a scenario, both India and Latin America will be served well if they pay more attention to the bilateral relationship. This would allow Latin America not only to reduce the US hegemony in the region to a certain extent but also to balance China. There is congruence on both sides on issues like climate change and the issue of agriculture subsidy at the WTO. Countries like Brazil, Peru, Chile and Venezuela are members of the International Solar Alliance, a global effort to deal with climate change initiated by India. New Delhi has been interested in seeking permanent membership of the Asia Pacific Economic Cooperation (APEC) and three LA countries -- Mexico, Chile and Peru -- will be helpful in India’s efforts as they are members of the APEC.
Lack of substantial political engagement is a grey area that needs to be addressed. PM Modi was in Brazil for the BRICS summit in 2014, apart from the G20 summit in Argentina in 2018. He also visited Mexico in 2016. Since he has a busy schedule, some visits to the region have been made by the President of India and the Vice President as well. It would have been a good idea if the PM could have visited some important countries like Chile and Peru after his G20 summit.
On the diplomatic front, India has only 14 embassies out of the 33 countries in the region. India had proposed to open three new embassies in Latin America in 2010 but nothing seems to have happened on that front. Incidentally, when India announced to open 18 new missions in Africa this year, some diplomats from Latin America met Foreign Secretary Vijay Gokhale, reminding him to first fulfil India’s promise made in 2010. Such efforts will also help in dealing with the perception that Brazil remains the focus on India’s LA policy as India and Brazil are members of groupings like the BRICS, the BASIC, the IBSA and the G-4.
In the last decade, trade has more than doubled, from $ 17.5 billion in 2008 to $ 36 billion in 2017. There is a rise in India’s exports by about 70%, from $ 7 billion in 2008 to $ 11.9 billion in 2017. Indian imports have more than doubled from $ 10.5 billion in 2008 to $ 23.6 billion in 2017. The region accounts for the biggest market for India’s vehicle exports and around 60% of India’s trade with LA originates from Gujarat. India has preferential trade agreements with Chile and sub-regional economic grouping, Mercosur while a free trade agreement is being negotiated with Peru. India is an observer at another sub-regional group, Pacific Alliance which accounts for around 40% of India-LA trade.
Energy is a key aspect with the LA accounting for around 20% of India’s crude oil imports, mainly from Mexico and Venezuela. This allows India to lessen dependence on oil from the West Asia, a region that remains politically vulnerable.
Since countries like Mexico and Colombia are not members of the OPEC, oil supplies from these countries lessen India’s dependence on this group as well.
LA can also help India in its fight against climate change and reducing its current account deficit. Three countries – Bolivia, Chile and Argentina hold most of the lithium reserves in the world and are also called ‘lithium triangle’. India plans to roll out a fleet of electric cars, at least one-third of its total by 2030. This will require lithium supplies as it is used in batteries of electric cars while India does not have enough reserves. This will lessen India’s dependence on crude oil and reduce oil import bill, thereby reducing current account deficit. However, India does not have an embassy in Bolivia which is accredited to India’s embassy in Peru. Food security can be another area where the two sides can complement each other as the LA has vast tracts of land.
The defence ties remain limited mainly because India is concerned with external threats while the Latin Americans face internal security issues like drug trafficking, crime and policing issues.
India can help them in capacity building areas in this regard. India also holds IBSA naval exercises, IBSAMAR and the 6th edition was held this year. India’s cost effective space programme is popular in the region and New Delhi has launched satellites for Argentina.
One of the big challenges India faces is the Uniting for Consensus or Coffee Club group that has members from Latin America and opposes reform of United Nations Security Council. Mexico, Colombia, Argentina and Costa Rica are members of the group who mainly oppose Brazil but since India and Brazil are members of G-4, India becomes the collateral damage in the process. Despite such hiccups, there is no dearth of goodwill on both sides and the time is ripe to bring Latin America in the ambit of India’s extended neighbourhood.
Dr Raj Kumar Sharma is an Academic Associate at the Faculty of Political Science, IGNOU, New Delhi
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