India - South America: Politics Secondary to Business
STORIES, ANALYSES, EXPERT VIEWS
Prime Minister Narendra Modi’s five-nation visit to Brazil, Argentina, Ghana, Trinidad & Tobago, and Namibia was New Delhi’s outreach to the Global South, headlined by the Brics Summit in Rio de Janeiro.
But politics, writes Hari Seshasayee (co-founder of Consilium Group and visiting fellow at the Observer Research Foundation ORF) “is secondary to business when it comes to Latin America. PM Modi’s visit complements an existing economic relationship that is driven largely by private actors across India and the Latin America and Caribbean (LAC) region. There is far more interplay between Sao Paulo and Mumbai than there is between Brasilia and New Delhi.”
India - Brazil trade: From a trade standpoint, “India is more important to Brazil than the other way around. In 2024, India was Brazil’s ninth-largest trading partner; for India, Brazil was in the 27th place. Trade can also be viewed from a broader, global context. For example, India’s trade with far-off Brazil is about the same as trade with neighbouring Bangladesh, and India exports more to Brazil than it does to Japan or Turkey. Brazil’s trade with India is more than its trade with neighbouring Chile or with major economies like South Korea or France.”
India-Latin America trade
Specific sectors wise, “the significance of India-Latin America trade amplifies multifold.” Over the past decade, 42% of Argentina’s vegetable oil exports have been shipped to India; that number reached 52% in 2024. On the other hand, India is amongst the largest providers of Latin America’s pharmaceutical products, agrochemicals, two- and three-wheelers, amongst other products. In large part, India exports value-added products to Latin America, while the region exports mostly commodities to India. The exceptions, writes Seshasayee “are India’s exports of unwrought aluminium or cotton, and Latin America’s exports of wine and processed foods.”
More edifying is the “investment between India and the LAC region. Indian companies employ about 16,000 people in Brazil, and 8,000 in Argentina. Across the region, the number reaches nearly 100,000…..”
Strategic sectors: There are more strategic sectors in play: Brazil’s aviation giant Embraer for example, recently opened a subsidiary in New Delhi, and India’s EXIM Bank opened its office in Sao Paulo earlier this year, its first in the region. In Argentina, India’s State-owned Kabil has started exploration of lithium blocks in 2024. “Once India establishes a lithium value chain domestically, including refineries capable of processing industrial salts, lithium carbonate and lithium hydroxide, its investments in Latin America’s lithium triangle could be a valuable contribution to securing direct and stable access to the critical mineral.”
A natural complementarity between India and the LAC region
In the final analyses, Seshasayee believes “New Delhi should formulate a standalone Latin America strategy, built on a foundation of energy and food security, and critical minerals. There is a natural complementarity between India and the LAC region: What India needs, Latin America has in abundance, such as mineral resources, large arable land for agriculture, and copious reserves of petroleum. Latin America, on the other hand, regularly seeks out India for its affordable health care and pharmaceutical products, its vehicles and machinery, amongst other things. The three pillars that New Delhi’s strategy can be founded on — energy security, food security and critical minerals…”
