Describe, explain and suggest improvement in the state of India’s relationship with Latin America. (2004)
India’s relationship with Latin America and the Caribbean (33 states, about 660 million people) has no dispute, no rivalry and little policy. It is economically substantial and politically light: the private sector arrived before the state.
The state of the relationship
- Trade: about US$39 billion in FY2024-25 on the usual series (totals vary with the treatment of Mexico and the Caribbean). India sells fuels, vehicles and medicines; it buys crude, gold, soybean oil and copper.
- Investment and services: Indian investment (about US$12 billion region-wide in 2018; over US$15 billion in Brazil alone today) spans hydrocarbons, autos, agrochemicals, pharmaceuticals and IT; about thirty Indian IT firms employed some 25,000 local staff in nearshoring centres (2018).
- Partnerships: a strategic partnership with Brazil (2006), a Privileged Partnership with Mexico (2007), and KABIL’s lithium exploration in Argentina (January 2024).
- Instruments: the India–Mercosur PTA (in force 2009, about 450 tariff lines) and an expanded Chile PTA (2017); talks with Chile on a CEPA and with Peru on a trade agreement are not concluded. India–CELAC troika talks (from 2012) are irregular; India–CARICOM summits met in 2019 and 2024.
- Recent momentum: Narendra Modi visited Guyana (November 2024) and Trinidad and Tobago, Argentina and Brazil (July 2025); Luiz Inácio Lula da Silva’s state visit (February 2026) yielded a critical-minerals pact and a five-year target of US$20 billion-plus in trade.
Explaining the state
- Complementarity pulls: the region holds about a fifth of world oil reserves, copper, lithium, edible oil and pulses, while India offers a large market and affordable medicines. Former ambassador R. Viswanathan argued in a 2018 MEA lecture that need runs both ways: India absorbs crude the shale-rich US no longer buys, and Latin suppliers cut India’s dependence on West Asian oil and Southeast Asian palm oil.
- Frictions push back: distance and missing shipping links, Spanish and Portuguese, few Indian settlers outside the Caribbean, regional fragmentation and political volatility.
- Indian priorities decide: a region posing no threat drew no attention. The only regional instrument remained the 1997 FOCUS: LAC export scheme, while China built a regional forum, policy papers and trade of over US$500 billion. Deepak Bhojwani, once ambassador to Colombia, names political will as the relationship’s prime mover.
Suggested improvements
- Institutions: an India–CELAC summit, annual ministerial talks and a written regional strategy with country tiers.
- Trade architecture: widen the Mercosur PTA, conclude the Chile and Peru agreements with critical-minerals chapters, and negotiate pharmaceutical registration reciprocity on the model of the 2026 Brazil MoU.
- Connectivity: a cargo-guaranteed shipping line and direct flights to break the low-volume trap.
- Finance and presence: more than the region’s roughly US$811 million in credit lines, Inter-American Development Bank membership, and resident missions in place of concurrent accreditation.
- Resources and energy: lithium and copper supply chains, more crude from Guyana and Brazil, and biofuels work through the Global Biofuels Alliance.
- People: Spanish and Portuguese teaching, area-studies centres, fuller use of ITEC, and the Caribbean Indian diaspora as a bridge into CARICOM.
- Development offer: digital public infrastructure and farm technology, where India’s model is distinctive and cheaper.
Conclusion
The relationship’s constraints are soft and its complementarities hard, which makes it the cheapest major gain open to Indian diplomacy. What it needs is not money on a Chinese scale but sustained institutional attention; critical minerals and energy security now supply the strategic reason that was missing.