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India’s trade with Latin America in 2016-17

India’s trade with Latin America in 2016-17

For those who think that Latin America is too far and cost of freight is too high and therefore the region should be less important for India’s trade, here is the eye opener from the  2016-17 (April-March) statistics of the Commerce Ministry of India.

-In 2016-17, India exported more to Mexico (3.5 billion dollars) than to neighbours such as Thailand (3.1 bn), Myanmar (1.7bn) and Iran (2.4 bn) or traditional trade partners Russia-1.9 bn and Canada-2 bn.

-India’s exports to Colombia ( 787 m) were more than the exports to some West European countries such as Austria, Ireland or Scandinavian countries.
-Guatemala had imported (243 m) more from India than some Central Asians and East European countries.
-India’s trade with Dominican Republic (900 m) was more than the trade with Portugal, Greece and some other European countries.
For those who think that it is very difficult for India to compete with the Chinese exports, here is another piece of information:
India beat China in export of pharmaceuticals to Latin America. India’s exports were 651 million dollars in comparison to China’s 404 million in 2016. In fact, in the last five years, India has been exporting more pharma to Latin America than China. What is even more interesting is the fact that India imports bulk of its raw materials from China, converts them into finished formulations and exports them.

Trade in 2016-17

India’s trade with Latin America in 2016-17 was 30 billion dollars of which export was 10.4 billion and imports 19.6 bn. The trade has gone up slightly from 29.7 billion in 201-16 but down from 43 billion in 201-15. The main reasons for the decrease in trade are the fall in commodity prices imported by India from Latin America and the recession of the region in 2015 and 2016. India’s import of crude oil from the region fell to 9.5 billion dollars in 2016-17 from 20 bn in 2014-15 thanks to the decrease in oil prices from over 100 dollars to less than fifty. The volume of crude imports had in fact increased.
Figures in million US dollars
India’s exports10.41013.7
India´s imports19.619.720.43
  India’s trade in 2016-17 in million US dollars
CountryExportsImportsTotal trade

Mexico 34732994
Bolivia 80174254
Costa Rica16059219
El Salvador60666
Dominican Republic225675900
In 2016-17, Brazil was the largest trading partner with 6.5 billion dollars, followed by Mexico- 6.4 bn, Venezuela-5.6 bn, Argentina- 3 bn, Chile-1.9 bn, Peru-1.8 bn, Colombia-1.4 bn and Dominican Republic- 900 million.

India’s exports

Mexico was the largest destination of India’s exports with 3.5 billion, followed by Brazil-2.4 bn, Colombia-787 m, Peru-699 m, Chile- 676 m and Argentina-512 m. Export to Mexico has increased by 21% from last year while it has declined in the case of the other large markets such as Brazil, Argentina, Colombia, Peru and Chile.
Major exports of India
Aluminium articles207
Synthetic fibres550
Plastic items350
Organic chemicals810
Iron and steel623
Equipments and machinery861
diesel 205
Chemical products566

Latin America was the leading destination of India’s vehicle exports with a share of 23% of India’s global exports. Mexico continued to be the main buyer of Indian cars with 1.6 bn accounting for 25% of India’s global exports. Vehicle exports to Mexico have been steadily increasing in the last three years and the increase from last year was an impressive 39%. Colombia, which was the number one buyer of Indian motorcycles came down to the third rank in 2016-17 with imports of 185 m, after Bangla Desh and Srilanka. Latin America had imported from India in 2016-17 motorcycles worth 354 million dollars, which was 25% of India’ exports to the world.


Major sources of imports were: Venezuela-5.5 bn, Brazil-4.1 bn, Mexico-2.9 bn, Argentina-2.5 bn, Chile-1.2 bn, Peru- 1 bn, Dominican Republic-675 m and Colombia-594 m.

Main imports: crude oil-9.5 bn, vegetable oil-2.9 bn, gold and precious stones-1.7 bn, copper 1.7 bn, raw sugar 1 bn ( imports mainly for refining and reexports to other countries) and wood-309 m.

The imports are set to increase given the growing demand for these items in India, driven by the increasing population and consumption as well as the high economic growth rate.

Outlook for 2017-18

The trade should go up next year with the recovery of the economies of the region in 2017. The GDP of Latin America had shrunk by 1.1% in 2015 and 0.5% in 2016. The GDP is expected to grow by 1.1% in 2017, helped by the recovery of global commodity prices. Except Venezuela, all the countries of the region have shown positive GDP growth. Even Brazil, which continues to suffer from political crisis, has turned around with positive growth this year.

Latin America will continue to contribute to India’s energy security with supply of crude oil. The region has large reserves and the capacity to increase production and exports to meet the increasing crude imports of India. South America has started supplying pulses which India has been importing more and more with the growing gap between consumption and domestic production.

The collapse of TransPacific Partnership (TPP) following the withdrawal of US by the Trump administration is good for India. The TPP had extra clauses for patent protection going beyond the WTO standards and this would have affected India’s generic medicine exports to Latin America.

The expanded Preferential Trade Agreement signed by Chile and India in 2016 has come into force from May 2017.  Peru and India have agreed to start negotiations for a FTA/ PTA and this should also help in boosting the trade with the region.

Indian exporters should focus on the markets of Pacific Alliance (Mexico, Colombia, Peru and Chile) whose economies are growing more and whose trade policies are more stable, transparent and predictable with the least protectionism.

Latin Americans have started paying more attention to India especially after the arrogant and insulting remarks of Trump against Mexicans and his protectionist trade policies. They also want to reduce the over dependence on China which has used its dominance to hurt the region’s industries and given rise to other risks. They attach importance to India which has overtaken China in GDP growth rate and see India as a non-threatening trade partner in the long term.

India’s exports could be doubled to 20 billion dollars in the next five years, if the exporters target Latin America more seriously and systematically.

R. Viswanathan is a retired Indian diplomat, writer and speaker specializing in Latin American politics, markets and culture. He has served as Ambassador of India to Venezuela, Argentina, Uruguay and Paraguay and also Consul General of India to Sao Paulo.