Latin America and Caribbean

• Intro- Latin America and Caribbean(LAC) is regarded as last frontier of India’s foreign policy. LAC has featured only symbolically and sporadically in the history of India’s foreign policy.
• LAC has suffered the “out of sight, out of mind syndrome.”

• Cooperation:
• Economic commission of LAC says India and Latin america are new poles of growth.
• NAM, G77 co-op
• Energy, food security,pharma, IT, film industry. 
• With 62 crore population a per capita income of $8000 , Latin American has potential to offer huge market for India’s exports
• Latin America has potential to diversify India’s energy imports as it has 20% of global crude oil resources.
• Major partners of India- Brazil, Mexico—>hence need for India to diversify its bilateral engagements.
• India’s preferential trade agreements with Chile and MERCOSUR (Argentina, Brazil, Uruguay, Paraguay and Venezuela) have given boost to the two- way trade. India is presently negotiating a Free Trade Agreement (FTA) with Mexico and Peru.
• Peru and Guatemala are partners in solar alliance
• UNSC votes,NSG votes.          
• India can import pulses and oil-seeds at low cost
• Unlike China which is gobbling up Latin America’s raw materials and flooding its markets with cheap goods, India is investing heavily in manufacturing and services sector. Latin Americans have begun to see the difference. According to a World Bank study, China’s success “is looked upon with admiration” but there is also “concern about the effects” of this engagement. In Africa, China’s deeper engagement has raised the spectre of “new colonialism.” It would not be surprising if Latin America thinks the same way in a not-too-distant future.
• Interestingly, the spurt in India’s trade and investment with Latin America is triggered largely by the dynamism that Indian IT, pharmaceuticals, mining, energy and manufacturing sectors have shown. 
• Earlier, India and Latin America were rarely at the table when major global decisions were made. Today, as an ADB study notes, “they are often seated side-by-side, shaping global negotiations on topics ranging from trade to climate change.”
• Import of lithium from lithium triangle countries-Argentina, Chile and Bolivia can act as boost for India’s National policy on electronics manufacturing, 2019
• “Focus-LAC” by Dept of Commerce to increase trade ties
• while China challenges the hegemony of USA in the global north, India can take leadership in global south.

• challenges:
• Growing Chinese footprint
• Regional instability in Chile, Venezuela
• unless an economic impetus is accompanied by an equivalent political impetus, ties would remain bogged down.
• India must look beyond Brazil and mexico and also engage with smaller players
• Absence of direct shipping services leads to very high freight cost between India and LAC
• Trade $40 B in 2018-19 ; china Latin america trade $264 B.
• India not a partner in Latin american financial institutions like IADB,Central american bank. Plus bilateral banking connections are non existent.

• Conclusion- As per inter American development bank- India is the next big thing in Latin America.
  In the changing global environment, new Delhi must remove the psychological barriers that have stopped it from achieving full potential in the relationship.  

• https://www.orfonline.org/expert-speak/44407-why-india-should-focus-more-latin-american-region/?amp
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