From Partnering for the Future to Advancing Economic Alliances – The India LAC Saga

Introduction

With a rich shared history, covering an expansive realm of sectors, India and the Latin America and Caribbean (LAC) have a long-standing relationship, which has over the years, witnessed steady strengthening of their economic and strategic ties.  Not only in trade, but culturally speaking, India and LAC have many similarities and a vibrant exchange of literary ideas through its poets like Octavio Paz, Rabindranath Tagore or even Victoria Ocampo, who has played a key role in moulding their political ecosystem.

The LAC region has become a key focus of India’s foreign policy, with sustained growth and diversified ties across 33 countries. The India-LAC economic relationship is characterised by expanding bilateral trade, increasing investments and a shared interest in diversifying economic ties. The complementarity of the economies is a key advantage as LAC’s resource-rich profile meets India’s growing demand for energy, food, and strategic minerals, while India’s manufacturing and service sectors cater to LAC’s rising middle class.

The LAC region possesses significant natural resources, including arable land, minerals and mineral fuels, which India views as important for its development. At the same time, India also has much to offer to LAC in terms of its knowledge resources and expertise in sectors such as pharmaceuticals and healthcare, information technology, renewable energy, and innovation, among others.

India and the countries of the region work together on various plurilateral forums such as BRICS, BASIC and IBSA, apart from G20 and multilateral organisations such as International Solar Alliance. India has several cooperation agreements with the regions which include The Central American Integration System (SICA); The Caribbean Community and Common Market (CARICOM); Southern Common Market (MERCOSUR); and The Pacific Alliance.

Bilateral Trade

Over the years, the total trade between India and LAC has seen a steady growth. Trade has increased from USD 35 billion in 2019-20 to USD 43 billion in 2023-24, growing at a CAGR of 4.48% over the last 5 years.

Brazil, at USD 12.23 billion, comes in as India’s top trading partner in LAC in 2023-24, followed by Mexico at USD 8.4 billion, Colombia at USD 4.3 billion, Peru at USD 4 billion and Argentina at USD 3.6 billion.

Today, as both regions seek to diversify their global partnerships, the increasing trade, investment, and diplomatic engagement between India and LAC countries offer immense potential, in areas of manufacturing, power and energy including RE, agriculture, mining and critical minerals, healthcare and pharmacy, tourism and technology.

Recommendations

With global trade and bilateral economic relationships finding themselves in a state of flux, it becomes imperative to expand the economic engagement between India and LAC region. The two regions have high potential for expanding trade. It is proposed that a target of USD 100 billion over the next 5 years be set.

Given that the LAC region has built a network of FTAs with other partners, the governments can take up FTA negotiations with India as well. There is also a need to ensure that digital payment systems for cross-border transactions are undertaken with UPI-like cooperation. There can be reduced shipping costs and air travel time through targeted measures, and initiation of India-LAC Connect as a digital platform for SME cooperation.

CII India LAC Conclave

With an aim to further bolster the trade and investment between India and the LAC region, CII organised the first LAC Conclave in 2007, and ever since it has seen 10 successful editions. This year, CII organised the 10^th edition in partnership with the Ministry of External Affairs, government of India and The Ministry of Commerce and Industry, Government of India in New Delhi from 19-20 March 2025. Under the theme of Advancing Economic Alliances for Advancing Economic Growth, this edition focussed on eight sectors including: trade mechanisms; healthcare & pharmaceuticals; mobility and automotives; agriculture & agri-processing industry; critical minerals & mining; power and RE; infrastructure & logistics; and services. The Conclave also had 4 focus sessions on India Central America Cooperation, CARICOM, MERSOCUR and the India Pacific Alliance.

This year’s editions was a roaring success and saw participation of over 20 ministers from 25 countries, over 600 delegates and more than 500 B2B meetings. There was also an exhibition participation from Indian companies and special product displays from Indian companies TAFE, TVS and Ralson Tyres.

Moving forward, there is immense potential for cooperation between India and the Latin America and Caribbean region, which would undoubtedly unlock new opportunities for both sides. A strategy of trade agreements, better logistics, strategic investments, and institutional support could support a target of doubling bilateral trade to USD 100 billion and raising investment flows by 2030.  With strong impetus from the governments and private-sector cooperation, this partnership could emerge as a new growth hub for the world in trade and investment.