India bets big on Latin America, Carribean trade; eyes 2X growth in five years

India is looking to deepen its economic ties with the Latin American and Caribbean (LAC) region, with a focus on expanding trade and investment across key sectors, union commerce minister Piyush Goyal said on Wednesday.

Highlighting the untapped potential for economic collaboration, Goyal called for ambitious steps to double trade volumes between the two regions in the next five years.

Goyal emphasised that the partnership between India and the LAC region is not just about business but also about cultural ties, shared traditions, and a mutual commitment to preserving heritage.

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While speaking at the 10th CII India-LAC Conclave in New Delhi, Goyal pointed out that the enthusiasm for festivals, sports, and history in both regions lays a strong foundation for closer economic cooperation. The conclave, he said, serves as an important platform to strengthen trade ties and enhance people-to-people connections.

The Mercosur factor

Laying out a roadmap for deeper engagement, the minister underscored the need to expand trade through preferential trade agreements with Mercosur and other bilateral arrangements.

Mercosur (southern common market) is a regional trade bloc in South America that promotes economic integration among its member countries.

The full members of Mercosur are Argentina, Brazil, Paraguay, and Uruguay. Venezuela, which became a member in 2012, has been suspended since 2016 due to non-compliance with the bloc’s rules.

In addition to its full members, Mercosur has several associate members that have trade agreements with the group but do not enjoy full membership benefits. These associate members include Bolivia, which is in the process of becoming a full member, along with Chile, Colombia, Ecuador, Guyana, Peru, and Suriname.

India is actively engaging with Chile and Peru to establish free trade agreements (FTAs). Negotiations with Peru began in 2017, with the seventh round concluding in April 2024 in New Delhi, aiming to enhance bilateral trade and economic ties.

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Renewables & resources

Goyal called for collaboration in renewable energy, particularly in lithium processing, battery manufacturing, and electric mobility, given the LAC region’s vast lithium reserves. 

India-Brazil cooperation in biofuels was also highlighted, with a focus on ethanol-powered vehicles as a sustainable energy alternative.

As per the commerce ministry data, India’s trade with Latin America and the Caribbean (LAC) has seen fluctuations in recent years. 

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In FY22, India exported goods worth $14.9 billion to the region while importing $21.7 billion. Trade increased in FY23, with exports rising to $17.6 billion and imports reaching $21.9 billion. However, in FY24, exports declined to $14.5 billion, and imports fell to $21.2 billion, mainly due to supply chain disruptions and the Red Sea crisis.