Tuesday, May 21, 2024

Why is India reaching out to Latin America?

Over the last few years, India’s outreach to Latin America has increased. External affairs minister S. Jaishankar, who has visited Brazil, Argentina and Paraguay, is to visit Guyana and Colombia later this month. Mint explains India’s interest in Latin America.

What’s the history there?

In the first decades after India’s Independence, the country’s limited diplomatic and economic reach forced it to prioritise ties with its neighbourhood and major Western powers. In its first annual report in 1948, the external affairs ministry said its focus on Latin America was limited despite India’s interest in the region. These challenges of limited resources and diplomatic reach were mirrored by Latin America’s sizable domestic challenges. The distance separating India and Latin America, too, limited interactions. However, end of the Cold War and India’s clout has offered new opportunities.

Why is India now interested in Latin America?

First, trade with Latin America has boomed. Since 2000, trade has shot up by about 25% annually and is near $50 billion. Industries like automotives have driven the increase. Second, India’s desire to diversify its energy dependencies has pushed it towards Latin America. Indian energy majors like ONGC are active in Colombia and Bharat Petroleum in Brazil. Renewable energy is a key interest, too, with potential for cooperation in ethanol and green hydrogen. The region is home to vital reserves of materials like copper and lithium, which will be crucial to India’s energy transition plans.

Photo: Mint

View Full Image

Photo: Mint

Which high level contacts have occurred?

Minister of state for external affairs Meenakashi Lekhi went on a visit to the region and met with senior officials in Cuba, Guatemala, El Salvador and Bolivia. Foreign minister S Jaishankar visited Argentina, Brazil and Paraguay in 2022. New Delhi has also hosted a number of regional leaders like the foreign ministers of Brazil, Argentina and Mexico for G20.

How has the region responded to India’s outreach?

Latin America has welcomed increased Indian interest and has tried to attract investment. Panamanian foreign minister Mencomo pointed out that Latin American nations can connect Indian companies with the wider Americas market. The region has been hit by covid and the Ukraine war. Many of the region’s major economies are struggling with poverty and inequality. As such, increased economic engagement with India is a key priority for many of the region’s economies.

Are there challenges?

While India’s trade with Latin America has grown, it pales in comparison to China’s massive $450 billion trade in the region. While Beijing is also a major lender to the region, India’s Parliament recently pulled up the external affairs ministry for disbursing just 1 crore to Latin America. Indian firms have lagged as firms race to take advantage of Latin America’s sizable mineral resources. India will also need to step up its economic diplomacy and join regional economic institutions like the Inter-American Development Bank.

Catch all the Politics News and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.

More
Less

#India #reaching #Latin #America

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest Articles