As India looks to fashion a major role for itself on the world stage in the second decade of the 21st century, its gaze needs to settle on wider horizons than its traditional preoccupation with its own troubled neighbourhood. One part of the world which is beginning to attract increasing Indian attention is Latin America.
Latin America has long been the Forgotten Continent in India — a region with which India might have found much in common but did not, separated as the two were by distance, language and the lack of any common history of interaction. Yet, with a population of 580 million, a GDP of $4.9 trillion (four times larger than India’s), and six per cent of global merchandise trade, Latin America is clearly a part of the world Indian policymakers cannot afford to neglect.

At 20 million square kilometres, Latin America also has a larger land surface than Russia or Canada, the largest biodiversity and the biggest fresh water reserves on earth; it is also largely democratic and peaceful, far removed from the inter-state wars that have bedevilled the rest of the world. And most important, over the past decade, it has managed to grow at an average of five per cent despite the global recession, with figures of 6.1 per cent in 2010, and about 4.5 per cent in 2011. This performance makes it a global success story to rival India’s own, and suggests a natural fit in an era in which modern communications has ensured that geography is now history.
The trends are encouraging. Trade between India and the region of Latin America and the Caribbean increased nearly ninefold between 2000 and 2010, reaching about $21 billion. While these numbers are relatively modest given the number of countries involved, the Chilean academic and diplomat Jorge Heine has outlined the case for “the New Latin America” — solid macroeconomic and fiscal management, as well as prudent financial and banking supervisory practices, sustained growth and poverty reduction — strengthening and enhancing trade relations with “the New India”, a land of “high savings and investment rate, and rapidly expanding middle class, whose demands for Western consumer products is growing in leaps and bounds”.
The case is a strong one. Though Latin America’s exports to India are largely of natural resources and products based on them, its import basket differs from the usual stereotype. Unlike Chinese exports, which have tended to flood the market at prices at which domestic manufacturers cannot compete, at least half of India’s exports are goods that can help Latin American industries manufacture goods more cheaply and compete with the world. The worry that increased trade could become a net negative for Latin America, by reducing it to a purveyor of agricultural products and an importer of finished goods (leading even to possible “deindustrialisation”), therefore does not apply to trade with India.
Indian investments in the region are also increasing, amounting to some $12 billion since 2000, with some of India’s bigger companies, including ONGC Videsh and the IT majors Tata Consultancy Services (TCS) and Wipro, present and active. Indian investment is helping Latin America to diversify its sources of economic growth, making the region less dependent on commodity exports. Smaller Indian ventures are also making inroads in the region, thanks to individual entrepreneurs who have challenged convention by making new lives for themselves in the region. I met a young Sikh in Colombia who has established a flourishing Ayurvedic practice in Bogota, helping fuel high-level interest in India’s alternative health systems. Many Latin American countries also possess exactly what India is looking for in fertile and well-watered land suitable for increased food production.
Another area with huge potential for growth is information technology and IT-enabled services, an industry that has played a significant role in expanding India’s presence. As Indian IT companies establish themselves in the LAC, hire locals, train them in Indian ways and expose them to the opportunities generated by providing IT-enabled services in a globalised world, and offer some significant technology transfers, this sector is likely to be seen as India’s unique contribution to the development and prosperity of the region.
The recent growth of trade and investment ties between India and Latin America has also encouraged much closer diplomatic relations. Today, LAC countries have 19 diplomatic missions in New Delhi, while India has 14 missions in the LAC region, both representing significant increases from 12 and seven, respectively, in 2002. In 2010, India opened a new embassy in Guatemala to cover Central America, but pending invitations from countries like El Salvador and the Dominican Republic to do the same have been deferred solely because of a lack of human resources in India to staff new establishments adequately. Inadequate attention to Spanish-language training in the Indian Foreign Service has also given New Delhi far too few diplomats ready, equipped and inclined to interact with Latin America in the language with which it is most comfortable.
The narrative of the last decade is sufficiently impressive to augur well for a significantly transformed relationship. The time has clearly come to look beyond the relatively modest figures for India-LAC trade or Indian investments in the region to the direction of current and future trends. The current occasional (and relatively infrequent) visits of policymakers have to be augmented in both directions, and the success of the handful of existing trade agreements needs to be built upon.
The India-LAC relationship could be the most interesting example of the transformation of the under-developed concept of South-South co-operation —from the rhetorical days when both regions advocated the statist concept of a New International Economic Order (NIEO) and clamoured for more resource transfers from the developed world, to an era in which the indigenous private sectors of both have become powerhouses driving their growth and prosperity. In India, where rhetorical genuflections to socialism have persisted stubbornly for longer than in Latin America, the pursuit of the unexplored potential of the region should and will transform the “Forgotten Continent” into the Continent of Opportunity. That requires a vision and energy that I believe to be incipient but in need of encouragement from the highest levels in New Delhi.

The writer is a member of Parliament from Thiruvananthapuram