India’s exports to Latin America amounted to $12.74 billion in 2020-21 (April-March), according to the figures released by the Commerce Ministry of India. The exports to the region have declined marginally by 3.3 per cent from $13.18 billion in 2019-20. This is not bad in view of the fact that India’s total global exports have declined by 7 per cent from $313 billion to $291 billion in the same period.
Brazil continued as the number 1 destination of India’s exports to the region, with shipments valued at $4.25 billion.
The other major destinations were:
· Mexico: $3.08 billion
· Colombia: $865 million
· Chile: $805 million
· Peru: $765 million
· Argentina: $688 million
· Venezuela: $557 million
Exports to Mercosur were valued at $5,199 million, Pacific Alliance $5,522 million and CAFTA (Central America + DR) at $1,143 million.
· Vehicles: $2,608 million
· Chemicals: $2,534 million
· Pharma: $1,196 million
· Machinery: $1,152 million
· Diesel: $1,034 million
· Textiles: $704 million
· Cotton: $417 million
· Plastics: $421 million
· Iron and steel: $599 million
· Aluminium products: $393 million
· Rubber products: $254 million
Latin America accounted for 30.5 per cent ($1.3 billion) of India’s global car exports of $4.3 billion. Mexico was the largest global market for Indian cars with $860 million in value of shipments. The US was second with $512 million. Other major destinations were Chile ($201 million) and Peru ($86 million).
India was the second-largest supplier of motorcycles to Latin America with $577 million in shipments. This is 28 per cent of India’s global exports, valued at $2 billion.
Major destinations were Colombia ($190 million), Mexico ($90 million), Guatemala ($84 million) and Peru ($53 million). Colombia was the third-largest global market for Indian motorcycles after Nigeria and Nepal. Some years back, Colombia was the number 1 destination. Indian brands are market leaders in Colombia and Guatemala. Hero Motors has invested $80 million in a production plant in Cali, Colombia.
India is the fifth-largest supplier of pharmaceuticals to Latin America. Major destinations of India’s pharma exports were Brazil ($317 million), Peru ($128 million), Chile ($123 million), Mexico ($114 million), Colombia ($68 million), Dominican Republic ($54 million), Venezuela ($51 million), Guatemala ($48 million), Bolivia ($29 million) and Ecuador ($28 million).
India’s exports to Latin American countries in comparison with neighbours, traditional trading partners
India’s exports to some of the distant Latin American countries are more than the exports to neighbouring countries or traditional trade partners with same or more population. This is a trend of the last several years.
· $209 million in exports to Dominican Republic (population 11 million), which is more than the $169 million to Cambodia (population 16 million)
· $331 million to Guatemala (population 11 million) versus $225 million to Kazakhstan (population 19 million)
· $865 million to Colombia (population 50 million) more than the exports of $779 million to the neighbouring Myanmar (population 53 million)
· $4.24 billion to Brazil and $3 billion to Mexico versus exports to Russia ($2.6 billion), Nigeria ($3.1 billion), Egypt ($2.2 billion) and Canada ($2.9 billion)
India exported more motorcycles (190 million) to Colombia than to neighbouring markets such as Bangladesh (98 million).
India’s car exports to Chile, valued at $201 million, are more than the exports to Nepal ($85 million), Bangladesh ($41 million), Sri Lanka ($3 million) and Myanmar ($4 million).
Major Latin American suppliers were Brazil ($3 billion), Mexico ($2.85 billion), Argentina ($2.63 billion), Peru ($1.52 billion), Colombia ($1.4 billion), Chile ($1.18 billion), Bolivia ($1.16 billion) and Venezuela ($714 million).
Venezuela used to be the major source of imports in the region for the last 15 years with supply of large volumes of crude oil. Due to the US sanctions, Venezuelan oil supply to India has come down drastically from its peak of around $10 billion.
Main import items in 2021
· Crude oil: $5,047 million
· Gold: $4,055 million
· Vegetable oil: $2,443 million
· Raw sugar: $612 million
· Copper: $479 million
· Machinery: $378 million
· Chemicals: $288 million
· Wood: $349 million
· Plastics: $162 million
· Fruits and vegetables: $110 million
Sources of crude oil imports: Mexico ($1,974 million), Brazil ($933 million), Colombia ($944 million), Venezuela ($644 million, down from $6.03 billion last year), Ecuador ($234 million) and Cuba ($67 million)
Gold import sources: Peru ($1,500 million), Bolivia ($1,156 million), Colombia ($378 million), Brazil ($270 million), Dominican Republic ($234 million), Mexico ($192 million) and Argentina ($324 million)
Argentina was the main Latin American supplier of edible oil, with imports valued at $2.19 billion, followed by Brazil ($256 million).
Decade of trade from 2010-11 to 2019-20
India’s exports had increased from $10.04 billion in the beginning of the decade to $13.7 billion in 2014-15. But the Latin American recession and economic difficulties caused a dip in India’s exports in 2015-16. Since then, the exports have increased steadily until the COVID-19 crisis.
India’s imports reached a peak of $31.38 billion in 2012-13 due to the high crude oil prices and large volume of India’s imports from Venezuela. But since then, the oil prices have come down and due to US sanctions, the volume of imports from Venezuela has also reduced drastically.
The annual India-Latin America trade had reached a peak of $44.08 billion in 2013-14 due to the high oil prices and large crude imports from Venezuela.
Latin America, the region of 19 countries, has a total population of 620 million and GDP of $5.4 trillion.
The region, which had a historic GDP contraction of 7.7 per cent in 2020, is forecast to rebound with a growth of 3.7 per cent in 2021.
The region’s external trade declined by 8.6 per cent in 2020. Latin America’s imports were $904 billion (down from $1,006 billion in 2019) and exports were $935 billion in 2020, declining from $1,007 billion in 2019.
There is potential for India to increase its exports to about $20 billion in the next five years if the Indian exporters and government intensify their export promotion seriously and systematically. At this time of austerity, Latin Americans look for affordable products from less-expensive sources. Although China fits this expectation, the Latin Americans seek to reduce their overdependence on China with which there is a growing trust deficit especially after the coronavirus, which originated from Wuhan.
Source : The Week