Why in the News?

The Prime Minister's recently visited Trinidad and Tobago, Argentina and Brazil, and participation in the 17^th BRICS Summit in Rio de Janeiro.

More on the News

• Highest Civilian Honours: The Prime Minister was conferred Order of the Republic of Trinidad & Tobago.
• Trinidad & Tobago: India announced the extension of OCI cards to the sixth-generation diaspora.

Significance of Latin America and Caribbean (LAC)-India Relations 

• Strategic:
  • Defense Cooperation: India and Brazil have deepened defence cooperation with Joint Defence Committee meetings and established a 2+2 Political-Military dialogue.
  • Critical Minerals Security: KABIL signed an agreement with CAMYEN to acquire five lithium blocks in Argentina, marking the first lithium exploration and mining project by an Indian state-owned company.
    • Chile, Argentina and Bolivia, called the Lithium Triangle, hold over 75% of global reserves.
  • Food Security: Latin America has become a key supplier of food commodities to India such as edible oils and pulses.
    • Argentina is one of the primary suppliers of edible oils, especially soybean oil, to India.
• Economic & Trade Relations:
  • Trade and Investments:
    • Total trade with the region reached USD 35.73 billion in 2023-24.
    • Investments: Indian companies have invested USD 12 billion in the past 15 years in IT, pharmaceuticals, energy, mining, manufacturing and agro-chemicals.
    • India has a Preferential Trade Agreement with MERCOSUR.
  • Energy Security: Crude oil imports from Venezuela, Mexico, and Brazil, accounted for 30% of India's total import from the region.
    • Climate Change and Renewable Energy: India extended a US$ 140 million Line of Credit to CARICOM for solar, renewable energy and climate-change related projects. CARICOM is a regional organization to promote economic integration and cooperation in the Caribbean Region.
    • India is partnering with Brazil to promote biofuel research and production through the Biofuture Platform.
• Cooperation at Regional and Multilateral Fora: 
  • Significant cooperation in groups like G20 (With Argentina and Brazil) and Groups like BRICS, IBSA and G4 (with Brazil).
  • Regional Groupings: India has an active participation and meetings with Community of Latin American and Caribbean States (CELAC), CARICOM, and Central American Integration System (SICA).

Challenges

• China Factor: China has established robust ties with Latin America and trade has registered a thirty-five-fold increase since 2000.
• Regional Integration Weaknesses: MERCOSUR faces internal divisions. (e.g., Brazil and Uruguay seeking bilateral deals, Argentina's threat to leave).
• High Transport Costs: Physical distance is a perceived reason for limited engagement, as direct air and shipping links are considered uneconomical. 
• Last Frontier in Foreign Policy: Latin America is often relegated to the far end of the three concentric circles that drive India's foreign policy, signifying its de-prioritization.
• Others: Language disadvantage, lack of influential Diaspora, etc. 

Way Forward

• Prioritize Political Engagement: Institutionalize high-level dialogues and integrate Latin America into foreign policy priorities.
• Strengthen Economic Linkages: Reduce tariffs, streamline regulations, and pursue free trade agreements to enhance reciprocal investment.
• Enhance Connectivity: Establish direct shipping routes, air links, and air freight corridors to lower costs and improve trade flow.
• Expand Technological Collaboration: Leverage Latin America's resources and India's technology strengths in renewable energy, agriculture, IT, and climate resilience.
• Mobilize the Private Sector: Encourage cross-investments through trade missions, networking platforms, and investment incentives.

Conclusion

India can transform its ties with Latin America by pursuing a proactive, multi-pronged strategy that deepens trade, investment, and cultural links while addressing logistical hurdles. Leveraging democratic values, it can build a durable partnership that advances shared development goals and strengthens both regions' positions in the evolving global order.