{"id":3590,"date":"2026-08-11T22:12:10","date_gmt":"2026-08-11T16:42:10","guid":{"rendered":"https:\/\/forumias.com\/psir\/notes\/india-and-latin-america\/"},"modified":"2026-08-11T23:02:12","modified_gmt":"2026-08-11T17:32:12","slug":"india-and-latin-america","status":"publish","type":"psir_note","link":"https:\/\/forumias.com\/psir\/notes\/india-and-latin-america\/","title":{"rendered":"India and Latin America"},"content":{"rendered":"
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PSIR Notes<\/a>\u203a<\/span>II-B India and the World<\/a>\u203a<\/span>India and Latin America<\/span><\/div>\n
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Paper I \u00b7 India and the World<\/div>\n

India and Latin America<\/h1>\n
Syllabus \u00b7 Paper II-B \u00b7 4<\/b> \u2014 India and the Global South : Relations with Africa and Latin America; Leadership role in the demand for NIEO and WTO negotiations.<\/div>\n<\/header>\n
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<\/p>\n

The last frontier \u2014 why the region matters<\/h3>\n
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  • Latin America has traditionally been viewed as the last frontier in India\u2019s foreign policy<\/span>, relatively neglected and overlooked.<\/li>\n
  • Some analysts suggest that this neglect is more psychological than geographical<\/span>. The region holds significant untapped potential.<\/li>\n<\/ul>\n
    \n\n\n\n\n\n\n\n\n\n\n\n
    Head<\/th>\nContent<\/th>\n<\/tr>\n<\/thead>\n
    Reforming global governance<\/span><\/td>\nShared interest in expanding the United Nations and the UN Security Council<\/td>\n<\/tr>\n
    Support for India\u2019s aspirations<\/span><\/td>\nLatin American nations have supported India\u2019s bid for a UNSC seat and played a key role in securing the Nuclear Suppliers Group waiver<\/span><\/td>\n<\/tr>\n
    Market access<\/span><\/td>\nApproximately 630 million people<\/span> with a combined GDP of about $4.9 trillion<\/span>; three Latin American countries are members of the G20<\/span><\/td>\n<\/tr>\n
    Rising trade<\/span><\/td>\nTrade grew at an annual rate of around 30 per cent<\/span> from 2000 to 2014<\/td>\n<\/tr>\n
    Resource wealth<\/span><\/td>\nIron and lithium, central to India\u2019s manufacturing and technological industries<\/td>\n<\/tr>\n
    Energy and food security<\/span><\/td>\nVenezuela\u2019s substantial oil reserves and the region\u2019s clean energy matrices; vast fertile lands with a relatively small population, Brazil as an agricultural powerhouse<\/td>\n<\/tr>\n
    Economic complementarity<\/span><\/td>\nEnergy, natural resources, services and pharmaceuticals<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

    Evolution of relations \u2014 and the Modi phase<\/h3>\n
      \n
    • Cold War era<\/span> \u2192 engagement limited by India\u2019s inward-looking, protectionist approach and its focus on the immediate neighbourhood; significant US influence in the region, India\u2019s closed economy and geographical distance constrained interaction.<\/li>\n
    • Post-Cold War re-engagement<\/span> \u2192 India\u2019s private sector re-engaged, particularly in information technology and pharmaceuticals. Participation in BASIC, IBSA and BRICS<\/span> widened cooperation.<\/li>\n
    • Institutionalized dialogue<\/span> \u2192 in 2012<\/span> the first Pan-LAC summit was held in New Delhi, formalizing dialogue between India and CELAC<\/span>.<\/li>\n
    • Trade<\/span> \u2192 India signed a Free Trade Agreement with MERCOSUR<\/span>; Latin American countries view India as a promising market in IT, agro-business, pharmaceuticals and entertainment.<\/li>\n
    • Technological cooperation<\/span> \u2192 tele-medicine, tele-education, e-governance and space capabilities.<\/li>\n
    • Diversification<\/span> \u2192 both sides seek to diversify trade partners amid rising protectionism in the West; Latin America seeks alternative markets after the US shale gas boom.<\/li>\n
    • Alternative to China<\/span> \u2192 India\u2019s rise is appreciated by countries concerned about China\u2019s extractive policies, high interest rates and lack of local employment in Chinese projects.<\/li>\n<\/ul>\n

      Consolidating relations under Narendra Modi<\/span><\/p>\n

        \n
      • Intervention has been intermittent. As Prime Minister, Narendra Modi visited Latin America only thrice<\/span>; two visits were on the sidelines of the 6th BRICS summit in Brazil<\/span> and the 13th G20 summit in Argentina<\/span>.<\/li>\n
      • As protests against Venezuelan President Nicol\u00e1s Maduro<\/span> intensified in 2019, the crisis posed a challenge; ONGC found itself in difficulty owing to delayed payment of dues by Venezuela\u2019s PDVSA. US economic sanctions on Venezuela threatened India\u2019s energy relations to some degree, even as India intended to develop energy relations with other states such as Mexico.<\/li>\n
      • Traditionally, engagement has been guided by India\u2019s role in NAM and by the idea of the \u2018Global South<\/span>\u2019, which still has resonance in Latin America. President Ram Nath Kovind<\/span> delivered a speech on \u201cIndia and the Global South\u201d at the University of Havana; Vice President Venkaiah Naidu<\/span> \u00b7 Vivek Mishra<\/span> attended the NAM summit in Venezuela in 2016.<\/li>\n<\/ul>\n

        Country-wise engagement<\/h3>\n
        \n\n\n\n\n\n\n\n\n\n
        Partner<\/th>\nContent<\/th>\n<\/tr>\n<\/thead>\n
        Mexico<\/span><\/td>\nSecond largest economy in the region after Brazil; has shown interest in a \u2018strategic partnership\u2019. Indian enterprises see Mexico as a \u2018springboard<\/span>\u2019 for access to the larger US market. India\u2019s second largest trading partner<\/span> in Latin America; bilateral trade in 2017-18 approximately US$8.30 billion<\/span>. In 2016 India exported more to Mexico than to Thailand, Myanmar and Iran. Since Mexico opened its oil sector to foreign participation in 2014, New Delhi has viewed it as a source of crude and associated investment; Dharmendra Pradhan<\/span> expressed interest in purchasing more crude and investing, and ONGC decided to bid for Mexican oil blocks<\/td>\n<\/tr>\n
        Brazil<\/span><\/td>\nBoth are widely regarded as \u2018rising powers<\/span>\u2019; association in BRICS and IBSA supports wider cooperation. Brazil was instrumental in guiding India through negotiations for the India-MERCOSUR Preferential Trade Agreement<\/span>. India\u2019s total trade with MERCOSUR in 2017-18 was over US$10.5 billion<\/span>. A Social Security Agreement<\/span> was signed after the 8th BRICS summit in 2016, exempting expatriates from paying contributions twice. Energy cooperation, where potential is high, remained insignificant: after investing more than US$400 million in 2006, ONGC floated a tender in 2018 to sell its BC-10 block investment. Trade grew over 20 per cent to a little over US$11 billion in 2014-15<\/span>, then slumped to just over US$8.50 billion in 2017-18<\/span><\/td>\n<\/tr>\n
        Argentina<\/span><\/td>\nThe 2019 visit of President Mauricio Macri<\/span> may prove significant at a time when Argentina-China relations have grown rapidly. Both sides are exploring cooperation in defence, nuclear energy and space<\/span>; the MoU on defence cooperation matters in view of Argentina\u2019s evolving military cooperation with China<\/td>\n<\/tr>\n
        Chile, Peru & others<\/span><\/td>\nChile is India\u2019s sixth largest trading partner<\/span> in the region. India and Peru are deliberating a comprehensive free trade agreement, with three rounds so far. India is looking at Guatemala to join the International Solar Alliance<\/span>, of which Brazil, Costa Rica, Suriname and Venezuela are members and Peru a founding member. Panama seeks to gain from ISRO, interested in a Telemetry, Tracking and Tele Command Earth station there. With Chile aboard the ISA and Bolivia interested, a new approach is forming though far from crystallised \u2014 the solar revolution in Chile and Bolivia\u2019s lithium-based potential offer models. MoUs with Chile and Bolivia, and those signed during Venkaiah Naidu\u2019s visits, concentrate on higher education and innovation, services-sector solutions, conventional healthcare and wellness, and knowledge sharing in civic engagement and financial inclusion; these need matching lines of credit and identified partner entities<\/td>\n<\/tr>\n
        CARICOM<\/span><\/td>\nThe Caribbean community helps India reinforce relations across the region and supports outreach to the larger Latin America. For CARICOM, relations with India and other emerging economies support regional integration and sustainable development, as complementary alternatives to shrinking traditional development cooperation. Narendra Modi<\/span> emphasised partnership in capacity building, development assistance, and disaster management and resilience, announcing a USD 14 million grant<\/span> for community development projects and a USD 150 million Line of Credit<\/span> for solar, renewable energy and climate-change projects. He extended an invitation to a CARICOM parliamentary delegation; building contact beyond government officials \u2014 with the opposition, other political actors and state officials \u2014 widens engagement. The blue economy<\/span> is a shared area under the UN Sustainable Development Goals; CARICOM also seeks cooperation in health, including complementary and alternative medicine, and is keen on India\u2019s wellness and medical tourism sectors<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

        Recent developments<\/h3>\n
          \n
        • High-level visits<\/span> \u2192 the Presidents of Chile and Paraguay and the Prime Minister of Jamaica in 2024-25; India reciprocated with visits to Guyana, Trinidad & Tobago, Argentina and Brazil.<\/li>\n
        • Diplomatic missions<\/span> \u2192 embassies opened in Bolivia and Paraguay; Honduras and St Kitts & Nevis established missions in Delhi.<\/li>\n
        • Trade growth<\/span> \u2192 bilateral trade reached $35.7 billion in 2023-24<\/span>, with both sides aiming at $100 billion by 2025<\/span>. India exports pharmaceuticals, IT services and automobiles, and imports crude oil and raw materials.<\/li>\n
        • Energy<\/span> \u2192 Latin America supplies nearly 20 per cent<\/span> of India\u2019s crude oil imports, with Brazil, Colombia, Mexico and Venezuela the key contributors.<\/li>\n
        • Indian companies<\/span> \u2192 Indian IT firms employ over 40,000 locals<\/span> in the region.<\/li>\n
        • Renewable energy<\/span> \u2192 India and Brazil have strengthened partnership in biofuels and solar energy; the International Solar Alliance drives shared goals.<\/li>\n
        • Digital public infrastructure<\/span> \u2192 India\u2019s UPI<\/span> payment system and vaccination databases have found resonance where governments seek to modernise governance and public service delivery.<\/li>\n
        • Agriculture<\/span> \u2192 millet cultivation in Guyana, edible-oil linkages, agro-chemical manufacturing in Argentina, Brazil, Colombia and Mexico, and agro-research tie-ups, with a focus on food security and climate-smart practices.<\/li>\n
        • Cultural affinities<\/span> \u2192 literary links running through Rabindranath Tagore<\/span>, Victoria Ocampo<\/span>, Cecilia Meireles<\/span> and Octavio Paz<\/span> have kept people-to-people connections alive.<\/li>\n<\/ul>\n

          Challenges<\/h3>\n
          \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
          Challenge<\/th>\nContent<\/th>\n<\/tr>\n<\/thead>\n
          Limited high-level engagement<\/span><\/td>\nSuccessive governments have shown limited interest; the absence of high-level visits is perceived as neglect, and recent prime ministerial visits have been tied to multilateral events. Joint Commission and other bilateral dialogues are conducted at the Latin American end by the Minister of State<\/span> rather than the Foreign Minister, unlike Chinese and other major-power practice<\/td>\n<\/tr>\n
          Trade imbalance and tariffs<\/span><\/td>\nIndia\u2019s trade volume stands at $42 billion<\/span> against China\u2019s $264 billion<\/span>; tariff rates in India of 65 per cent<\/span> against China\u2019s 12.5 per cent<\/span> create significant barriers<\/td>\n<\/tr>\n
          Insufficient investment<\/span><\/td>\nIndia has invested $12 billion<\/span> in the region, which needs improvement<\/td>\n<\/tr>\n
          Absence of a comprehensive policy<\/span><\/td>\nThe lack of a well-defined policy document hampers clarity and direction<\/td>\n<\/tr>\n
          Infrastructural deficiencies<\/span><\/td>\nLimited consulate presence, absence of direct flights, lack of shipping services<\/td>\n<\/tr>\n
          Competition with China<\/span><\/td>\nChina\u2019s trade volume is roughly tenfold higher; its scale in commodities, infrastructure finance, critical minerals and logistics crowds Indian firms out of large projects<\/td>\n<\/tr>\n
          Thin trade architecture<\/span><\/td>\nThe preferential agreements with MERCOSUR and Chile are modest; India has begun an upgrade with Chile towards a CEPA<\/span> and signalled interest in expanding MERCOSUR coverage, but outcomes are pending<\/td>\n<\/tr>\n
          Concentration and logistics<\/span><\/td>\nTrade is concentrated in a few partners and commodities (crude, ores, select manufactures), making it cyclical. Long distances, limited direct shipping and air links, and complex intra-regional connectivity add costs. Latin America does not function as a single market, pushing India towards a country-by-country approach and raising transaction costs<\/td>\n<\/tr>\n
          Small diaspora, language gaps<\/span><\/td>\nIndian communities in continental Latin America are small, offering fewer ready commercial networks; limited Spanish and Portuguese capacity among Indian MSMEs slows market entry and after-sales support<\/td>\n<\/tr>\n
          Perception deficits<\/span><\/td>\nA persistent perceptual distance endures. Indian businesses often overstate risks about costs, corruption and macro-instability, while many in the region still reduce India to narrow images. Limited India-focused research centres and market intelligence slow the discovery of opportunity<\/td>\n<\/tr>\n
          Under-representation of smaller nations<\/span><\/td>\nWhile Brazil and Mexico have benefited, smaller nations lag behind, facing high tariff barriers and insufficient facilitation<\/td>\n<\/tr>\n
          Regional divides<\/span><\/td>\nNot taking account of Latin America\u2019s internal divides can cost opportunities. The balance within MERCOSUR is delicate, and existing proximity with Chile and Mexico offers safer, though smaller, footholds<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

          Views of scholars \u00b7 theory \u00b7 way forward<\/h3>\n
          \n\n\n\n\n\n\n\n\n\n\n\n\n\n
          Scholar<\/th>\nPosition<\/th>\n<\/tr>\n<\/thead>\n
          Manish Chand<\/span><\/td>\nIndia must take decisive action to strengthen the relationship through deeper engagement, collaboration and mutual growth<\/td>\n<\/tr>\n
          Deepak Bhojwani<\/span><\/td>\nExpand ties beyond economics into political and strategic dimensions. Political ties have improved since the Cold War; democratization in Latin America and India\u2019s liberalization built connection through the communication revolution and globalization. Strategy should begin with a hard look at the current relationship, disaggregated to sub-regional and where necessary country-specific level; the lack of institutional memory on both sides calls for verification of vital facts and updated statistics. Goals, a programme and a structure for regional dialogue should follow, incorporating the India-CELAC joint statement of 2012<\/span>, whose commitments largely remain on paper \u2014 even the minimal pledge of annual Foreign Ministerial meetings has not been fulfilled. The prime mover is political will<\/span>: India\u2019s trade with 54 countries in Africa, around $70 billion, is comparable with its trade with 34 countries of Latin America and the Caribbean in volume and composition, yet the attention given to Africa is far greater<\/td>\n<\/tr>\n
          V. Shivkumar<\/span><\/td>\nExplore opportunities beyond Brazil<\/td>\n<\/tr>\n
          Shyam Saran<\/span><\/td>\nOrganise an India-Latin America summit, modelled on the India-Africa summit<\/td>\n<\/tr>\n
          R. Viswanathan<\/span><\/td>\nThe economic potential remains underexploited; India needs a standalone Latin America policy<\/span>, similar to China\u2019s focused approach. The lack of a specific policy and the irregularity of high-level visits limit the relationship<\/td>\n<\/tr>\n
          Harsh V. Pant<\/span><\/td>\nGrowing engagement provides a buffer against global volatility, in line with complex interdependence and the mutual benefit of reduced geopolitical friction<\/td>\n<\/tr>\n
          C. Raja Mohan<\/span><\/td>\nIndia must engage more comprehensively, not only for resources but to shape the global order through BRICS and the G20, where Brazil and Argentina are essential partners<\/td>\n<\/tr>\n
          S. Jaishankar<\/span><\/td>\nOn his 2023 visit, emphasised India\u2019s role as a democratic alternative<\/span>, offering the region a diversified partnership beyond traditional powers<\/td>\n<\/tr>\n
          Cairo Henrique Dias Duarte<\/span> \u00b7 Chietigj Bajpaee<\/span><\/td>\nIndia already holds a soft power presence and can benefit from its position as a third path<\/span> and its untainted reputation compared with the US and China. Latin American politicians are wary of the political costs of proximity to Washington, and China\u2019s debt diplomacy has not gone unnoticed. A tailor-made bilateral diplomacy<\/span> should build on existing successful ties \u2014 Mexico in the oil sector, and the Andean countries of Chile and Peru, using Pacific entry points such as the Pacific Alliance \u2014 and extend to smaller countries from Uruguay, Bolivia and Paraguay to most of Central America, which still lack Indian diplomatic missions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

          Theoretical linkages<\/span><\/p>\n