Indian companies have so far invested $16 billion in the South American region and 60 per cent of the current bilateral trade is in oil, hydrocarbons, minerals and agriculture commodities.
Thanks to the efforts made by Vinod Surana, Partner, Surana & Surana International Attorney, interest in Latin American countries has been expanding. The Suranas organised last year a reception to the Governor of San Luis, Argentina, Claudio Javier Poggi and his 62 member delegation. A full-fledged commercial office of India was set up in Chennai with Adriel Dalgaard Knott as Managing Director.
Distance is a mindset and language not an issue…
San Luis, a province in Argentina, is very competitive in economic activity and is socially inclusive with a budget of a thousand million dollars; by law 50 per cent of this goes directly to investment in infrastructure.
Spanish and Portuguese are the languages in Latin America and it takes long flights, of over 30 hours, to reach these countries. Though many consider language and distance as business barriers, Surana points to distance as a mindset and language not an issue. “If you can do business in Africa with multitude of dialects, why can’t we do it with Latin America? Culturally they are close to India. They are emotional; family-oriented and are very friendly,” he said.
Adriel is quite passionate about the scope for a quantum jump in two-way trade between Argentina and India. He conceives boldly of an increase in two-way trade between the two countries to $ 10 billion. At present it is just around $2 billion. Argentina is as large as India in geographical area, but has a population of just 40 million, around half that of Tamil Nadu! Population growth is just 1.1 per cent. Literacy rate is 98 per cent and per capita income on purchase power parity is close to $ 18,000. Spanish is the official language.
Adriel referred to the investment-friendly policies of Argentina and the ease of doing business. With the recent devaluation of the currency peso, Adriel pointed to much increased competitiveness.
Rich scope of trade in agri-products
The UPA government took special efforts to improve relations with the South American countries.
Indian Ambassadors R Viswanathan and S Swaminathan made special efforts to expand awareness on the resources-rich South American countries among Indian businessmen.
The availability of vast tracts of land on low prices (several countries permit foreigners to buy land) and low population density, lend for development of agriculture and agriculture products. China has been making great use of this endowment. China has been funding infrastructure development to facilitate import of soybean and other agriculture products from South American countries.
During August 2012, a dozen Ambassadors and heads of missions of South American and Caribbean countries visited Chennai (see IE August 2012). With the establishment of a full-fledged office, there are efforts at expanding relations between India and South American countries. Adriel referred to plans to open an office of the Consulate General for Latin American countries in Chennai.
Adriel pointed to the preferential trade agreement between the members of Mercosur, a regional grouping of countries of the South American continent of more than 350 million inhabitants and India. He pointed to the strategic location of San Luis providing for easy reach to those countries and cities of this region. The high standards of living, educated and skilled labour and the potential for knowledge-based industries, Adriel stressed, should pave the way for collaboration between the two regions. He referred in particular to food processing, bio technology, renewable energy, software and IT services and olive oil industries as offering rich scope.
Dr Manmohan Singh took several initiatives to expand contacts with South America. The new government could do well to work further on this.