Trade underscores Pratibha Patil’s LatAm visit

by Dave

Financial Express

The fact that the President of India, Pratibha Patil, chose Latin America as the first destination for her state visit is reflective of the importance that India attaches to further strengthening its partnerships with countries of that dynamic continent. Although it is not usual for a business delegation to accompany the president, for the first time, a huge delegation is accompanying the country’s president to the three countries in that region: Brazil, Mexico and Chile.

Senior government officials point out that in the past, the problems of connectivity have acted as an obstacle to greater interaction between India and Latin America. However, while physical connectivity remains an impediment, trade and economic interaction is growing rapidly. This is not only because of the greater global interest and outreach of Indian public and private sector companies but also because of the new dynamics of South-South cooperation.

Nearly 80% of Brazilian cattle stock derives its origin from India’s Nellore variety, which is known in Brazil as Zebu. In fact, the 2006 marked the 100th anniversary of the import of first cow from India into north-east Brazil.

“We have established an Overseas Indian Facilitation Centre in Brazil, which can be your window to invest in and benefit from India,” officials said, adding, “Work has begun on establishing a ‘Diaspora Knowledge Network’—an electronic platform to facilitate transformation of ideas into community action in India.”

With Brazil, India’s trade last year was $3.2 billion, with Mexico it was $2 billion, and with Chile about $2.4 billion. With Brazil, the trade target of $10 billion by 2010 and with Mexico $5 billion by 2010 was set when the two presidents were in India last year.

While the government has no specific trade target in Latin America like it has in Africa, officials say that India-Latin America summit is in the pipe-line. Also, the companies in the region are not really forthcoming on the precise investments that they make.

However, in Brazil there is a huge presence of TCS, the Cellofarm, Zidus Cadilla, Glenmarc, Torrent, BEML, Mahindras, IRCON, Vijay Pharmaceuticals, Vijay Electricals, Pidilite, Bajaj, Hindustan, Rajshri, Renuka Sugars and Raj Industries. Brazilian investments in India are Marco Polo and Tata Motors. The long-green coloured buses plying on the Delhi roads are the result of a joint venture between these two companies.

The Brazilian steel firm Geddof has invested here, also CVRD has set up an office in India. In Mexico, there is a huge Lakshmi Mittal investment, Videocon, Ranbaxy and Claris Life Sciences, Dr Reddy’s, NIIT, Sasken Communications, TCS, Infosys, Aditya Birla Group, Reliance—they are all there.

Meanwhile, FICCI has suggested the areas where both India and Brazil can explore business opportunities: pharma products, medicines and healthcare; aviation: jets and helicopters; engineering products with special focus on agricultural equipment; ethanol production in India with Brazilian technology, and sale of ethanol produced in Brazil to India; chemical products, agri-chemicals, pesticides, inseticides to be exported from India to Brazil; manufacturing of Indian two-wheelers in Brazil; collaboration in the IT and software sectors; collaboration in the financing and banking sectors, with new lines of credit; urban infrastructure, such as projects for railways, highways, roads, ports, power plants, electricity, water and gas distribution; processed food and consummer goods; leather sector: Brazilian companies are looking for Indian partners to set up operation and manufacturing units for shoes in India; autoparts: Brazilian companies are seeking for Indian suppliers of autoparts and also seeking possibilities of joint production.

At a seminar organised by the MEA and CII, Virendra Gupta, joint secretary, Investment and Trade Promotion (ITP) metioned that, “The Latin American and Caribbean countries are becoming increasingly important to a globalising India, to Indian businessmen as well as to the apex shapers of trade and commerce.”

The energy resources from the region can be leveraged for infrastructure development by Indian companies, he said and added that the government is encouraging Indian entrepreneurs to undertake long-term capacity building in these countries.

In fact, the Latin American countries not only want India to say that it is interested in the region but act on it as well through augmenting business and tourism, says Hans Dannesberg Castellanos, ambassador, Dominican Republic and Coordinator, Group of Latin American and Caribbean Countries. Thirteen Caribbean countries from the region have set up missions in India and El Salvador is in the process of doing so, he said and added that each country is working on making visas easy for Indian citizens to facilitate people to people contact and South-South cooperation.

This assurance regarding visas is very encouraging for Indian businessmen and the MEA will also endeavour towards streamlining the procedures regarding travel for businessmen to the region, Gupta said.

With a combined GDP of three trillion dollars, Latin America and the Caribbean is the next big destination for Indian industry. While trade with these countries had grown from $3 billion in 2005 to almost $7 billion in the current financial year, the imports from the region too have seen a similar rise. The need of the hour is to use this complementary potential in a mutually beneficial manner.

Several heads of missions from the Latin American and Caribbean Region have highlighted the fact that the trade relations between India and the region had increased positively over the past years and were encouraging to the industry members in offering all possible help on information and policy matters relating to trade and investments with their country.