India’s exports to Latin America increase by an impressive 19% in 2022-23

India’s exports to Latin America reached a record high of 22.41 billion dollars in 2022-23 (April-March), according to the Commerce Ministry of India. The exports have increased by an impressive 19% from 18.89 billion dollars in 2021-22, exceeding the 6.86% increase of India’s global exports.

India’s exports to some of the distant Latin American countries are more than the exports to neighboring countries or traditionally important trade partners. This is a trend of the last several years, not an one-year-wonder. Examples:

-India’s exports to Brazil (9.9 bn) are higher than to the traditional trade partners such as Japan (5.46 bn), France (7.6 bn), Italy (8.7 bn) and neighbors such as Thailand (5.7 bn), Nepal (8.01 bn) and Sri Lanka (5.11 bn)

India’s strategic exports growth

-Exports to Mexico (5.2 bn) are more than the exports to Russia ( 3.15 bn), Canada (4.11 bn), Spain (4.66 bn) and Egypt (4.1 bn)

-Exports of 273 million dollars to remote Honduras are more than the exports of 220 m to nearby Cambodia.

-Exports of 465 m dollars to the distant Guatemala are more than the exports of 437 m to Kazakhstan

-Exports of 5.2 billion dollars to Mexico,  1.45 billion to Colombia and 1.17 billion to Chile are also higher than the exports to some other neighbors and traditional trade partners.

Car exports

Car exports to Latin America were 2225 million dollars (up from 1793 m in 2021-22). This was one third of India’s global car exports of 6.68 bn dollars. Mexico was the second largest global market for Indian cars with 973 m.  Other major destinations: Chile 357 m and Peru 203 m, Colombia 110 m, Ecuador 97 m, Panama 75 m and Guatemala 50 m.

Motorcycles

Exports of motor cycles were 921 million dollars. This is 33 % of India’s global exports of 2.79 bn.

Colombia was the # 1 global market for Indian motorcycles with 308 million dollars.

Other major destinations in the region were: Mexico 195 m, Guatemala 89 m and Peru 45 m.

India is the second largest supplier of motorcycles to Latin America.

Pharmaceuticals

Pharma exports were 1.45 billion dollars. 

Major destinations of India’s pharma exports:  Brazil 345 million dollars, Mexico 130 m, Chile 117 m, Venezuela 87 m, Colombia 75 m, Peru 67 m, Guatemala 54 m, Dominican Republic 53 m and Ecuador 34 m.

India was # 1 global supplier to Nicaragua, # 2 supplier to Guatemala, # 3 for Honduras and # 4 for Chile.

Major exports

Petroleum Products   4.7 bn (up from 2.1 bn last year)

Vehicles     4.33 bn (increased from 3.84 billion dollars last year)

Chemicals  3.4 bn (India is # 3 top supplier to Latin America)            

Machinery  2.73 bn                   

Pharma      1.45 bn  

Iron and steel  763

Aluminum products  662 m               

Textiles       630 m   

Rubber products 470 m            

Cotton.         431 m                

Plastics.         409 m               

Imports 

India’s imports from Latin America were 25.59 billion dollars, marginally lower than 25.62 bn 2021-22. Major suppliers were: Brazil 6.67 bn, Mexico 3.87 billion, Argentina 3.93 bn, Colombia 2.63 bn, Bolivia 2.55 bn, Peru 2.25 bn, Chile 1.44 bn, Ecuador 1.02 bn and Dom Republic 360 m, Panama 283 m and Venezuela 253 m

Main import items: 

Crude oil  7.6 billion dollars

Gold.        6.6 bn  

Vegetable oil 5.7 bn 

Copper    1.87 bn

Machinery  245 m

Wood        562 m

Chemicals 392 m

Iron and steel 321 m

Fruits & vegetables 210 m

Crude oil imports which reached a peak of around 15 billion dollars in 2013-14 has come down drastically due to US sanctions on Venezuela and the bounty of less expensive Russian crude.

Main sources of crude oil imports: Mexico 2.8 billion dollars, Brazil 1.9 bn, Colombia 1.8 bn, Ecuador 775 million and Venezuela 123 m. 

Venezuela used to be the major source of oil imports in the region for about fifteen years since 2001. But the US sanctions have drastically cut down the Venezuelan supply from its peak of around 10 billion dollars in 2013-14

Gold import sourcing: Bolivia 2.54 bn, Peru 1.79 billion dollars, Brazil 744 m, Colombia 675 m, Dom Republic 272 m, Argentina 254 m, Mexico 163 m and Ecuador 128 m. The imports are  unrefined raw gold.

Latin America is the main source of soy oil imports of India. Argentina, as usual, was the #1 global supplier of soy oil with 3.3 billion dollars, followed by Brazil 2.4 bn. 

Chile, the main supplier of copper and other mineral concentrates from the region supplied 1.03 bn, followed by Peru 391 m, Panama 204 m and Brazil 141 m.

Main suppliers of wood from the region: Uruguay 177 m, Ecuador 103 m, Brazil 76 m, Argentina 53 m, Panama 49 m and Costa Rica 25 m.

India was the eighth largest destination for the global exports of Latin America. The region exported more to India than to Germany, UK, Italy and France.

Trade 2022-23

Figures in millions of US Dollars 

Trade from 2010-11 to 2022-23

The annual India-Latin America trade in 2022-23 is the highest ever in Indo-Latin American trade.

India’s exports had increased from 10.04 billion dollars in the beginning of the decade to 13.7 bn 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 resumed growth since 2021.

India’s imports reached a peak of 31.38 billion dollars in 2012-13 due to the high crude oil prices and large volume of India’s crude imports from Venezuela. 

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Figures in billion USD

Target – 50 billion dollars

Latin America is a substantial market with 19 countries, a population of 620 million and GDP of 6 trilion dollars with a per capita income close to 10,000 dollars. The Indian exporters are still in the early stage of discovery and exploration in the last two decades. In 2022, Latin America’s total imports were 1.4 trillion dollars. Of this, India’s share is just 1.6%.

India could set a target of 50 billion dollars in the next five years. This is easily achievable if the Indian exporters, export promotion councils, industry bodies (such as CII and FICCI) and the government intensify their export promotion seriously and systematically with adequate investment. It is good to see the emphasis on trade and business made by External Affairs Minister Jaishankar during his visit to the region last month. He has visited more countries in Latin America than any of his predecessors.

Latin America contributes to India’s energy and food security as well as minerals needed for “ Make in India”. The Lithium Triangle of South America (which has half of the world’s reserves) can supply Lithium and other minerals such as Cobalt and Nickel for India’s ambitious plan for electrification of vehicles.

The Latin Americans seek to reduce their overdependence on China with which there is a huge trust and trade deficit. As part of their diversification strategy, they attach importance to the benign, large and growing market of India.

India should open embassies in Ecuador, Bolivia, Costa Rica, Honduras, El Salvador, Nicaragua and Uruguay which accounted for 1.33 billion dollars of exports.  Opening of embassies in these seven countries can be done with a mere one percent of the total export earnings from these countries.

India should sign FTA s with Mexico, Colombia and Peru where India is at a disadvantage vis-à-vis the FTA partners of these countries. India already has PTAs with Mercosur and Chile.

India should join as a member of the Inter-American Development Bank to enable Indian companies to participate in the projects of the Bank. In recent years, Indian companies have started making entry in projects in the region in sectors such as power transmission and renewable energy. For example, Kalpataru Power Transmission Ltd of Mumbai got a single EPC contract of 431 million dollars In Chile. More such contracts will be possible if India becomes a member of the Bank.

The upcoming India-Latin America Business Conclave to be hosted by CII in 3-4 August this year should be organized on a bigger scale to reflect the growing trade and the large potential for more.