India is investing in Latin America
Until the last half-century, Latin America was not important to India, maybe because of the distance, different cultures or language barrier. However, during the last few years Indian companies have turned those three factors IGNORE INTO advantages.
India and Latin America have discovered a surprisingly amount of political and economic similarities, complementarities and synergies of their respective markets and mindsets that have lead them to strengthened their engagement and cooperation.
In recent years, India’s leading companies have invested billions of dollars expanding their presence in Latin America, increasing trade flows and raising India’s global brand.
India’s steel giant, Jindal Steel & Power, has invested USD2.3 billion in an iron ore mine in Bolivia, the largest foreign direct investment project in Bolivian history. At the same time, a variety of businesses have entered the continent:
Around two dozen of Indian IT companies operate in the region, employing 25,000 of local staff; UPL Limited, an Indian agribusiness company, receives 26% of its total revenue from Latin America; The Mumbai-based Glenmark Pharmaceuticals made Buenos Aires, Argentina, the center of its oncology business, whereas Torrent Pharmaseuticals accounts 22.8% and 20.5% of investments in international subsidiaries from Brazil and Mexico, respectively.
One of the biggest Indian businesses in Latina America is the Aditya Birla Group, which currently generates USD 2 billion in revenue in the region from activities like aluminum production and the manufacture of viscose yarn. Anurag Srivastava, company operations leader in Latin America, said that the corporation is working to expand all over the region, seeing the currency devaluations and lower asset pricing in several countries as advantages. “Some companies are deterred by issues of distance, language and the relatively high costs of doing business in Latin America,” Srivastava said. “We see Latin America as a strategic market and are taking a long-term approach.”
While Latin Americans welcome Indian businesses, India perceives Latin America as a key contributor to its energy and food security. India imports 20% of its crude oil from Brazil, Colombia and Mexico; their second-biggest import is minerals, in which Latin America is rich and has large reserves; copper from Chile is the main export mineral. The third-largest import is vegetable oil (soy and sunflower oil), mostly from Argentina.
India and Latin America have built a strong commercial relation over the past years. Indian investments in Latin America promise employment prospects and capital flows, while Latin America can take advantage of the investments to enlarge its market and grow its economy. It’s a sustainable partnership that augurs a long-term benefit to both regions.
