India and Latin America

Discussion in 'Foreign Relations' started by nrj, Feb 22, 2012.

  1. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Policy wonks in Latin America eagerly await the reports of the U.N.'s Economic Commission on Latin America and the Caribbean (ECLAC). Based in Santiago, with a history of leadership by heavyweights such as Raúl Prebisch, Enrique Iglesias and Gert Rosenthal, and known as “Latin America's think tank,” ECLAC pulls no punches. It is often able to identify emerging trends in the world political economy long before others. Uniquely for a U.N. agency, its peer-reviewed journal, ECLAC Review, edited by one of the region's most senior economists, Osvaldo Sunkel, is a prestigious outlet for path-breaking pieces on international political economy issues.

    Much of the recent work of ECLAC's International Trade and Integration Division has been on Asia and its links with region. A few weeks ago, it released its first report on India and India-LAC links. Titled India and Latin America and the Caribbean: Opportunities and Challenges in Trade and Investment Relations (LC/L346, November 2011), it was just in time for a seminar organised by the Indian Embassy in Buenos Aires, “The New India and the New Latin America: Synergies and Complementarities,” in a joint venture with ECLAC. The report and the seminar's deliberations throw fresh light on one of the hottest topics going these days — the new impetus acquired by South-South trade and investment flows in the wake of the Great Financial Crisis (GFC). They complement last year's reports from the Inter-American Development Bank — India: Latin America's Next Big Thing? — and another study released by the Latin American and the Caribbean Economic System, officially known as Sistema Económico Latinoamericano y del Caribe (SELA), in Caracas on the same subject.

    Latin America today

    The underlying question is the following: is the glass half empty or half full?

    By this I mean, do the relatively meagre absolute numbers of India-LAC trade (a little over $20 billion in 2010) or of Indian FDI in LAC (some $11 billion) tell the whole story? Do they merely confirm the long-standing suspicion that only incurable romantics could ever believe in serious economic exchanges between India and Latin America, given the sheer geographic and cultural distances between both? Or, as others would have it, do the ongoing trends and the enormous rise in trade and investment links over the past decade point in a different direction?

    Much depends on our assessment of which side is right in this debate, and the jury is still out on this. Raúl Rivera, an innovation guru and author of a recent best-selling book, Nuestra hora, soon to be out in English, pointed out in Buenos Aires that, for a variety of reasons, Latin America has developed a reputation for being a small, fragmented region, racked by conflict and populist dictators. Nothing could be further from the truth. In terms of land mass, with some 20 million square kilometres, Latin America has a larger surface than either Russia or Canada, the two largest countries. It is the region with the largest bio-capacity and biodiversity, and the one with the biggest fresh water reserves anywhere. Almost all countries have now democratically elected governments. It is also a peaceful region, with few inter-state wars in the course of the past 100 years, and, accordingly, with the lowest defence expenditures. Its economy as a whole, measured in purchasing power parity (PPP) terms, is the fourth largest in the world — bigger than Japan's, and only behind the EU's, the U.S. and China's.

    Over the course of the past decade, it has also become one of the growth poles of the world economy and thus a natural partner for India. With a population of 580 million, a GDP of $4.9 trillion (four times larger than that of India) and six per cent of the world's merchandise trade, it has shown remarkable resilience in the face of the GFC. Although its GDP fell by 1.7 per cent in 2009, its recovery was swift, growing at 6.1 per cent in 2010, and at a (projected) 4.5 per cent in 2011. This is in marked contrast to many European countries now on the verge of bankruptcy and a United States still in the throes of the recession.

    This is, then, the New Latin America, open for business. Its solid macroeconomic and fiscal management, as well as prudent financial and banking supervisory practices, have put the economies of the region on a sound footing. The region grew at an average of five per cent from 2003 to 2008, its best performance in 40 years. Much progress has been made in lowering poverty. Expanded trade with Asia buttresses the commodities boom that undergirds its steady growth. This leads us to India's role in the region, or more precisely, that of the New India. The latter's gradual, but steady, opening to the world economy, its high savings and investment rate, and rapidly expanding middle class, whose demands for western consumer products is growing in leaps and bounds, offer enormous opportunities for expanded international trade.

    The ECLAC report is emphatic: “The region's trade with India was negligible until the beginning of the past decade. Since then, trade with the Asian country has burgeoned.” U.S. $20 billion in India-LAC trade is not an insignificant sum, though it is highly concentrated, with Chile, Brazil, Argentina and Paraguay providing the bulk of the region's exports to India, and Brazil, Peru, Colombia and Nicaragua a significant amount of the imports. Preferential Trade Agreements (PTAs) with Chile and with Mercosur have boosted inter-regional trade.

    Going through the trade data is revealing. Though Latin America's export basket to India is comparable to that of other Asian markets — being mostly composed of natural resources and products based on the latter, its imports from India are somewhat different, as “the import basket from India consists not only of manufactures, but also natural resource based manufactures.”

    Three advantages

    Latin America, and in particular South America, is becoming a significant source of natural resources for India — oil, copper, soya, and iron ore, among others. A number of economists have warned about the danger this entails, and how Chinese and Indian demand for commodities could push the region towards its de-industrialisation, and a narrow specialisation as agro-mineral exporting economies. Yet, this need not necessarily be the case. The demand for food will continue to expand exponentially in India. It is possible for Latin America to move up the value chain in this area, and start to export more sophisticated and elaborate farm products. Food security will emerge as a critical issue in years to come, and India-LAC partnerships in this area could be highly profitable. The Latin American industry also needs to get into the Asian value chains that have become such a critical part of international trade.

    The report identifies some interesting differences between Chinese and Indian outward FDI. These show the special opportunities Indian capital offers to LAC. They are basically three: 1) Indian FDI is largely fuelled by supply and demand and private companies, whereas the Chinese one is mostly led by government 2) India's FDI goes mostly to the developed world and to manufacturing and services, whereas Chinese FDI is mainly geared to developing countries and mining, and 3) India's comparative advantages lie in its corporate governance and management, whereas China's are in government strategy and economic diplomacy.

    India's IT and IT-enabled services industry have played a major role in India's outward expansion — and Latin America has benefited. TCS has established a presence in eight of the larger Latin American countries; Wipro and Evalueserve, among others, are also there. This implies significant technology transfer in a cutting-edge economic sector.

    So, which is it? Is the glass half-empty or half-full?

    The answer can be gleaned from what has happened in the past decade. A combination of government initiatives and private ventures opened new vistas in India-LAC trade and investment, leading to an eightfold expansion in interregional trade. A steady expansion of state visits in both directions (Luiz Lula, the former Brazilian President, visited India three times in eight years) gave the right signals to the private sector, which followed through in a variety of areas.

    Yet, with this new decade come new challenges. One-off visits and a few trade agreements need to be taken to the next stage. If we want to realise the full potential of India-LAC ties, the density of these exchanges needs to be increased. This implies institutionalising them, making them part of the regular agenda of government and the private sector.

    The ECLAC report suggests a number of steps. I would highlight three: 1) developing joint strategies for trade and investment promotion; 2) working together on infrastructure, competitiveness and innovation; and 3) launching a series of policy dialogues on inter-regional cooperation.

    We have come a long way since the days when India and some Latin American countries championed the cause of what was then called the New International Economic Order (NIEO) in the late 1970s and early 1980s. But there is little doubt that the challenge of making South-South cooperation work is once again at the top of the policy agenda — though this time driven by sound economic opportunities rather than by wishful thinking.

    (The writer is CIGI Professor of Global Governance at the Balsillie School of International Affairs, Wilfrid Laurier University in Waterloo, Ontario. His book The Dark Side of Globalization, co-authored with Ramesh Thakur, is published by United Nations University Press.)

    The Hindu : Opinion / Lead : Latin America, India's next big thing?
     
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  3. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Latin America beckons, India's trade may reach $50 billion by 2014

    NEW DELHI: India's trade with Latin America could go up to $50 billion by 2014 on the back of projected high economic growth in both the regions, said a senior government official.

    "The region (Latin America) is going to be a regular source of imports of crude oil, edible oil, minerals, timber and other products which India needs to sustain its high growth. Agribusiness, food processing, energy and mining are the growth areas of Latin America and the Indian companies should target them for trade and investment," said R. Viswanathan, India's ambassador to Argentina, Uruguay and Paraguay.


    At present, the Latin American region accounts for 4 per cent of India's trade. Two-way trade between India and Latin America was recorded $23 billion in 2010. It included $9 billion of India's exports to Latin America and imports of $14 billion.

    India targets to increase its exports to Latin America to $20 billion by 2014.

    Viswanathan said the region would also offer in the coming years great investment opportunities to Indian companies.

    "The 2014 World Cup, 2016 Olympics and the $270 billion investment in hydrocarbons by Brazil are the big ticket projects offering unmissable opportunities for Indian companies."

    Latin America and the Caribbean region had an estimated 4.3 percent GDP growth in 2011 and it is projected to grow by 3.7 percent in 2012 despite the continuing crisis in Europe, uncertain outlook in United States and the slowdown in the Asian markets.

    Both imports and exports of Latin America and the Caribbean region crossed the trillion dollar mark in 2011. Imports increased by 23 percent to $1.038 trillion, while exports increased by 23.1 percent to $1.097 trillion.

    India is diversifying its product basket and foreign trade market to shield its economy from uncertainties in Europe and the US. It has increased economic engagement with Africa, Latin America and the Caribbean.

    As part of its market diversification programme, the Indian government is offering various incentives to boost exports to Latin America and the Caribbean.

    "There is a unique opening for India at this time. The Latin Americans are disillusioned with Europe and US who are facing crisis after crisis. They are reassessing the China euphoria after their industries and jobs have been hit hard by the flood of cheap imports," said Viswanathan.

    Latin America is a large market of 20 countries. India has entered into preferential trade agreements (PTAs) with Chile and the Mercosur bloc, comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela.

    Viswanathan said Latin Americans were attracted by the large, growing, democratic and non-threatening India which faces political and developmental circumstances similar to theirs.

    "They see the value addition of Indian investment to their economies, industries and especially human resource development by the Indian IT and BPO companies who employ 20,000 Latin American youth," he said.

    Latin America beckons, India's trade may reach $50 billion by 2014 - Economic Times
     
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  4. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Latin American markets beckon

    [​IMG]

    The ratio of trade to world GDP has increased from 6 per cent in 1950 to over 20 per cent in 2010. This is mainly because of faster growth of world trade compared with GDP. In 2010, world GDP grew by 3.6 per cent, while volume of trade grew by 14.5 per cent. So a country aspiring for high economic growth cannot ignore international trade.

    When India's traditional export markets of the European Union, Japan and the US are in trouble, it makes more sense to look for non-traditional markets. Latin America is one such market for pushing exports and sourcing edible oil, crude oil and gas, coal and copper.

    Realising the importance of the region, India has entered into preferential trade agreements (PTAs) with Chile and Mercosur bloc, comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela. It would be interesting to examine the impact of these PTAs on bilateral trade flows.

    Under India-Chile PTA, which became operational in 2007, India provides duty concessions on 178 items while Chile on 296 items. Under India-Mercosur PTA, which became operational in June 2009, India provides preferential market access to 450 export items of Mercosur and, in return, gets duty preference on 452 items.

    Analysis of trade data (see table for details) shows that:

    in the period 2001-11, India's exports to the world grew by five times; its exports to Latin America grew by 10 times, except export to Venezuela, Uruguay and Mexico;

    post-PTA, India's exports to Chile grew by 45.7 per cent while India's overall export to Latin America grew by 139.9 per cent in 2007-11;

    post India-Mercosur PTA, India's exports to Latin America as a whole grew by 65.8 per cent as compared to its export to Argentina (13.1 per cent), Brazil (49.7 per cent), Paraguay (8.38 per cent) and Uruguay (37.8 per cent) in 2009-11. In comparison, India's export to non-PTA Latin American partners grew at faster rates, for example, Mexico (38.4 per cent), Colombia (49.8 per cent) and Costa Rica (78.3 per cent).

    As for imports, India's imports from the world grew by six times, while its imports from Latin America as a whole grew by 13 times in 2001-11. In this period, highest import growth was recorded by Venezuela (201 times), Colombia (15 times) and Brazil (10 times). In the four-year post-PTA period, imports from Chile declined by 19 per cent. In the two year post India-Mercosur PTA period, while imports from Argentina, Brazil and Paraguay posted impressive growth, Paraguay gave a lacklustre performance (8.3 per cent). The highest growth was witnessed with respect to imports from non-PTA partner Colombia (50 per cent) and Costa Rica (78.3 per cent).

    LATIN AMERICA INDIA INVESTOR FORUM

    At a panel discussion of the recent Latin America India Investor Forum, the role of PTAs in increasing bilateral trade was discussed. Delegates from both India and Latin America agreed that it would be too early to conclude that Preferential Trade Agreements (PTAs) had not been successful in boosting India-Latin America trade. The reasons sighted were:

    limited nature of India's PTAs with Latin American countries covering a few hundred items with 10-20 per cent duty discounts on most items;

    relatively narrow trade baskets with copper concentrates, crude oil and edible oil accounting for two-third of India's total imports from Latin America;

    high duties on products with trade potential (such as, textiles and clothing, transport vehicles and food products;

    dearth of direct shipping lines between India and Latin America, thus increasing shipment time and cost by as high as 25-30 per cent;

    poor trade infrastructure, such as port inefficiencies, poor inland connectivity, cumbersome and expensive export import formalities which add to trade transaction cost;

    increasing cost of compliance with non-tariff trade barriers, especially TBT and sanitary and phyto-sanitary measures;

    currency fluctuations;

    non-coverage of trade in services and investment under PTAs.

    MEASURES TO BOOST TRADE

    Given the slow progress of the WTO Doha Round, deepening of the existing PTAs into full-fledged comprehensive economic partnership agreements, covering trade in goods, services and investment will be a great boost to bilateral trade flows.

    Besides, both Latin American nations and India are actively negotiating several FTAs, so there is no option but to consider expansion of preferential trading arrangements with Latin American nations, not only for acquiring duty advantage but also for protecting the existing comparative duty advantage.

    Improving trade infrastructure and rationalisation of trade documentation need urgent attention. As per the latest World Bank's Ease of Doing Business Report, roughly 36-69 per cent of the time taken and 15--38 per cent of the cost of export formalities are incurred on documentation which reduces net realisations from export. In the case of India, 50 per cent of the time taken and 38 per cent of the total cost is incurred on export documentation. For Venezuela, these ratios are 69 per cent and 25 per cent respectively.

    TRADE PROSPECTS

    At present, Latin American region accounts for 4 per cent of India's trade. Given the comparable level of per capita income, similar consumer preferences and complementarities of resource endowment, a target of 10 per cent share of Latin America in India's trade can be attained, if the issues highlighted above are addressed.

    (The author is an expert in international trade for a corporate house.)

    Business Line : Opinion : Latin American markets beckon
     
  5. nrj

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  7. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Context of the India-Latin American relations

    Latin America and India are not only in different neighbourhoods, as it were, but have also been members of different clubs. In addition to the considerable distance between South Asia and the Western Hemisphere, they have also been part of very different international groupings. India, was the founder and leader of the Non-Aligned Movement (NAM), a largely Afro-Asian lot, of which very few Latin American countries were full and active members.[1] The latter have tended to stick to themselves in various regional bodies What used to be called the British Commonwealth has been another significant reference point for New Delhi, albeit one where, almost by definition, no Latin Americans are to be found[2].

    The inward-looking, import-substitution development strategies (ISI), followed both by India and by most Latin American countries from the fifties to the seventies, were not exactly conducive to trade diversification, bringing about Latin America’s debt crisis in the eighties. In the early nineties, trade between India and Latin America was negligible[3]. Yet, in the course of one decade, the moment these two regions started to open up, the volume of trade increased significantly, with Indian exports increasing eleven times. By 2004, inter-regional trade had reached U$ 3 billion, a lot better than the meagre U$ 475 million of 1991-1992, but still a very modest amount. In 2003, in fact, just one Latin American country (and not even the biggest one), Chile, exported more to China (a little over U$ 3 billion) than all of Indo-Latin American trade put together, and the figures on Chinese-Latin American trade had reached U$ 30 billion by then, ten times more than trade with India. (Beyond Neruda and Tagore: The Challenge of Indo-Latin American Relations: Jorge Heine, Ambassador of Chile to India and Sri Lanka)

    India’s trade with the region is quite limited in relative terms. Nevertheless, it has been increasing significantly during the past few years. India’s exports to the world have grown in nominal terms during the past five years by 24.6%. During the last year, exports totalled US$ 183.084 billion. When compared with US$ 75.386 billion that were exported during 2004, Only 3.2% of the total exports of this country have Latin America and the Caribbean as its final destination. During 2008, the total amount of exports to the region amounted to US$ 5.898 billion. As evidenced in tables 1 & 2[4] below – which shows both the performance of Indian exports to the region, and its imports from Latin America and the Caribbean – the increase in trade exchanges with our region has been quite significant. The growth rate of Indian trade with the region has been higher than the growth rate of the general trade of the Indian economy. Hence, the relative weight of exports of India to the region has increased during the past few years. In 2004, Indian exports to Latin America and the Caribbean accounted for 2.4% of the total foreign sales of India. In turn, during 2008, this figure grew to 3.2% of the total reported. (Direction of Trade Statistics (DOTS) published by the International Monetary Fund)

    Context of the India-Latin American relations | Knowledge Tank
     
  8. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Latin America invites India to extend trade relations

    In a bid to tap the immense trade potential in India, Latin America and the Caribbean countries have called for a greater trade engagement with India. All these countries involved have a similarity in possessing limitless potential for diversified trade engagement amid tough global macro-economic conditions stemming from the 2008 financial crisis.

    “India and LatAm are two fast-growing economic regions of the world...We should promote new partnerships for inter-regional trade cooperation by taking advantage of complementarities," said Venezuela ambassador to India Milena Santana Ramirez.

    Currently, the countries have partnership in the areas of hydrocarbons, mining, commodities, pharmaceuticals and information technology.

    LatAm region offer vast land and water resources, stable political governments and huge markets.

    Additionally, the economic reforms are underway in all countries which would lead to fast recovery from the lingering global financial meltdown. Therefore, the resources are expected to find a proper channel through the huge market and several opportunities offered by India.

    “Business leaders should aim at diversifying the export basket, applying new technologies and encouraging innovation to gain competitiveness besides reducing transportation and transaction costs to benefit consumers in both regions," added Ramirez.

    India's merchandise exports to LatAm countries jumped 1,012 per cent from 960 million dollars in 2001-02 to 10.7 billion dollars in 2010-11. The imports moved up 1,151 per cent from 1.01 billion dollars to 13.8 billion dollars in the same period, said the records with the industry body Associate Chamber of Commerce and Industry of India (ASSOCHAM).

    The exports to LatAm countries include petroleum crude and products, transport equipment, drugs and pharmaceuticals, fine chemicals, ores and minerals, man-made yarn, fabrics and made-ups, machinery and instruments, metal products, and readymade garments. While, the imports include petroleum crude and products, metalifer ores and metal scrap, vegetable oils, sugar, iron and steel, electronic goods, organic chemicals, and transport equipment.

    Latin America invites India to extend trade relations
     
  9. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    India for expanding trade ties with South American countries

    With the government aiming at USD 500 billion exports in the next three years, India has called for widening of its trade agreement with MERCOSUR bloc comprising Brazil, Argentina, Uruguay and Paraguay.

    “It is important that the leaders on both sides (India and MERCOSUR) proactively take steps to expedite completion of the process for expansion of the Preferential Trade Agreement (PTA),” an official statement quoted Minister of State for Commerce and Industry Jyotiraditya Scindia, who is visiting Latin America, as saying.

    Addressing business delegates in Uruguay yesterday, Mr. Scindia highlighted the bilateral opportunities available between the two countries.

    “There is tremendous possibility for bilateral cooperation (between India and Uruguay) and we need to deepen engagement at the institutional level and expand the strategic relationship,” he said.

    He also stressed that the two countries should increase their bilateral trade to USD 1 billion from the current USD 110 million.

    Mr. Scindia further said Double Tax Avoidance Agreement (DTAA) and Bilateral Investment Promotion and Protection Agreement (BIPA) between the two countries are critical to expand economic relations.

    The government is targeting African and Latin American countries to increase exports and is also providing certain fiscal sops to exporters to explore these markets.

    India’s exports to MERCOSUR bloc during April-September were estimated at USD 2.25 billion while imports too were in the same region.

    India-MERCOSUR PTA came into effect from June 1, 2009.

    The major sectors covered in the offer list of India under the PTA include meat, chemicals, leather goods, iron and steel products, machinery items and electrical machinery.

    As per the agreement between India and MERCOSUR, the two sides agreed to create conditions and mechanisms for negotiations by granting reciprocal tariff preferences. In the second stage, they aim to negotiate a free trade area between the two parties.

    http://www.thehindu.com/business/Economy/article1988423.ece
     
  10. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Vedanta Resources Looking to Buy Latin America Coal Mine – Report

    Vedanta Resources PLC is looking to acquire a Latin America-based coal mine and is willing to offer up to $5 billion, the Times of India newspaper reported Friday, citing the company’s chairman.

    “We generally do a couple of acquisitions every year. This year, we are looking at a coal mine in Latin America with huge coal reserves,” Vedanta Chairman Anil Agarwal told the newspaper.

    The report, however, didn’t give any details of the name or location of the coal mine.

    Thursday, local media reports said the company has offered up to 160 billion rupees ($3.2 billion) to buy out the federal government’s remaining stakes in two of its units, Hindustan Zinc Ltd as well as the erstwhile Bharat Aluminium Company.

    Vedanta Resources Looking to Buy Latin America Coal Mine – Report - Deal Journal India - WSJ
     
  11. addiction

    addiction Regular Member

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    Vedanta is doing a great job...though based in London, founder is Indian and has strong presence in India...I recommed to invest in Sterlite/Sesa Goa, HZL ;-)
     
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    Chile-India negotiate extension of Trade Agreement

    In the first three days of February the Fourth Round of the Partial Scope Agreement (PSA) in force between Chile and India was held in New Delhi.

    According to Rodrigo Contreras, bilateral director of the Directorate General for International Economic Relations (Direcon) and leader of the Chilean delegation, "extending the current agreement aims to increase the number of products with preferential tariffs" covered by the current protocol.

    It also has the goal of "deepening disciplines on sanitary and phytosanitary measures and those related to trade technical barriers."

    According to Contreras, the link between Chile and India will foster the trading of marine products, among others.

    "We hope this exploratory conversation serves as a kick off for discussion of a comprehensive Free Trade Agreement (FTA) with India and thus help to deepen the existing disciplines, including, for example, issues such as investment or government procurement", continued Direcon bilateral director.

    During the meeting, the chief negotiators agreed to end the deepening of the Partial Scope Agreement in mid 2012.

    Chile is the first Latin American country that managed to sign a bilateral trade pact with India, a huge market of 1,200 million of people.

    According to data released by Direcon last year Chile exported products to the Indian market for USD 1,944 million and imported for USD 488 million.

    Moreover, the trade relationship with India has a trade balance surplus for Chile of USD 1,456 million.

    FIS - Worldnews - Trade agreement extension negotiated with India
     
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    nrj Stars and Ambassadors Stars and Ambassadors

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    India and China's Challenge to Latin America; Opportunity Or Threat?

    China’s and India’s fast economic growth since 1990 is paralleled only by their growing presence in policy discussions throughout the Latin America and the Caribbean (LAC) region. The success of these Asian countries is looked upon with admiration, but there is also concern about the effects that growing Chinese and Indian exports may have on the manufacturing and service sectors throughout LAC. Blame for the private sector’s poor performance in some LAC countries often falls on the growing presence of China, and to a lesser extent India, in world markets.

    Part of the concern in LAC can be attributed to its loss of economic importance compared with the two Asian economies, despite a broad range of reforms in the region, which started in the mid- to late 1980s. In 1980, LAC’s economy was twice as large as those of China and India, which jointly represented 3 percent of world gross domestic product (GDP). By 2004, LAC was 20 percent smaller than China and India. Today, China is the sixth largest economy in the world when measured according to GDP and India the tenth. Together they account for 6.4 percent of world GDP.

    The fast economic growth of China and India was accompanied by their rapid integration into world markets while LAC lagged behind.
    Today, China’s and India’s combined share of world exports is 50 percent larger than LAC’s share, whereas in 1990 the reverse was true. In the late 1980s, LAC had a trade-to-GDP ratio roughly equal to the trade-to-GDP ratio of China, and two times larger than the trade-to-GDP ratio of India. By 2004, the trade-to-GDP ratio of China was 35 percent larger than the trade-to-GDP ratio of LAC, and India’s trade-to-GDP ratio was only 14 percent smaller than LAC’s. China is currently the third largest trading economy in the world (just behind the United States and Germany), while India ranks 25th.

    Read full report here-

    http://siteresources.worldbank.org/DEC/Resources/China_India_Challenge_to_LA.pdf
     
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    nrj Stars and Ambassadors Stars and Ambassadors

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    India mulls IDB membership to boost trade with Latin America; FinMin may have to shell out $300 million

    NEW DELHI: India is likely to join a multilateral bank this year to give a fillip to its trade ties with Latin America that have expanded at an unprecedented rate in the last decade.

    The finance ministry is considering an investment of about $300 million to become a member of the US-based Inter-American Development Bank (IDB), which supports development in Latin America and the Caribbean region with a corpus of over $60 billion.

    The foreign ministry had been pitching for an IDB membership almost every year since 2001, but the finance ministry had been reluctant as there was hardly any trade with the region then. The recent spurt in economic ties has spurred a re-think, with the commerce ministry giving its backing.

    "There is a time for everything, and given the growth in trade since 2001, I think the time has come to seriously evaluate this (IDB membership), which the ministry of finance is doing," said Jyotiraditya Scindia, Minister of State for Commerce and Industry.

    A membership of the bank would facilitate easier credit for Indian entrepreneurs seeking to invest in the 43-nation Latin American and Caribbean markets. More importantly, it will signal long-term commitment to a region that has seen interest from China but has greater natural complementarities with India. China joined IDB in 2009.

    India's trade with Latin American countries (LAC) has grown at over 1,000% in the last decade, from less than $2 billion in 2001 to $25 billion in 2010-11. In the same period, the region's share in India's total trade basket has more than doubled from 1.8% to 4%.

    Indian corporate investments in the region are also peaking-crossing the $15-billion mark recently. With Indian firms such as Reliance Industries, Essar, Renuka Sugars, GAIL and United Phosphorus exploring big-ticket investment opportunities across sectors, officials expect these numbers to scale up fast.

    "With the world's economic architecture changing, it's very important that India integrates with this part of the world," Scindia said. The minister heads a committee on trade and investment ties with the Latin America and Caribbean region, which is expected to suggest measures to ease bottlenecks in economic transactions in March.

    [​IMG]

    A senior foreign ministry official said that big Indian firms were capable of entering the region on their own, but middle-rung companies would need credit support for tying up joint ventures with local partners. "The Exim Bank of India won't lend to such projects, but the IDB could offer funds through local partners," he said.

    While the region's population of about one billion has boosted Indian exports in pharmaceuticals, engineering goods and textile products, officials see greater opportunities due to similarities in growth patterns and the mutual needs of the two regions.

    "Over the next two decades, many LatAm countries need to upgrade their infrastructure. The region offers huge tracts of land and hydrocarbon reserves, which can help us meet our food and energy security goals," the official said. "If we want to realise these opportunities, we need to enter now."

    An essential for acquiring IDB membership is purchase of its shares and contribution to its Fund for Special Operations, which is expected to cost about $300 million but can be paid in tranches.

    "The Bank is always open to the possibility of eventual negotiations for membership by India and by other countries," an IDB spokesman told ET, while denying any ongoing negotiations with India.

    The foreign ministry is keen on prompt action as the shares on offer in the bank won't be available forever. "Some European countries had committed to join the bank but couldn't back it with funds. We can tap into those shares only for a limited time," the official said.

    "If India takes this step, Delhi would be sending a very positive signal about its real intentions regarding Latin America," said Juan F Cordero, Costa Rica's Ambassador to India.

    "It would be possible to get resources from the bank to finance projects that involve both countries," Cordero said, pointing to possibilities in infrastructure projects, easier procedures for commerce and technical cooperation like 'buying' India's IT expertise.

    IDB currently has 48 member states including developed nations such as the US, Germany, France, Canada and the UK, besides three Asian countries-China, Japan and South Korea-which acquired membership recently.

    India mulls IDB membership to boost trade with Latin America; FinMin may have to shell out $300 million - Economic Times
     
  15. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    But for now, the only nation which we seem to concentrate on is the Brazil- thanks to our myopic politicians and their obscession with the pakistanis....


    We need the support of the Latin Americans for a whole lot of issues from UN security council reforms to Kashmir.... Frankly, we have not made major effort regarding this matter...
     
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  16. Vishwarupa

    Vishwarupa Senior Member Senior Member

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    For a new highway, from Rio to Delhi

    Expectations are high for the fourth summit of Brazil, Russia, India, China and South Africa, to be held in New Delhi on March 29. With an economic crisis in the eurozone and signs of another global recession, anticipation is mounting for how the BRICS leaders will address the world economic slowdown and how far they will push to reform the institutions of global governance.

    Yet with the spotlight on the economy, a promising and tangible development agenda could be overlooked. At every summit, members have renewed their pledge to strengthen cooperation on social protection, public health, food security and agriculture. But little has been achieved so far. For India — home to a third of the world's poor — these efforts should be a priority.

    The potential benefits of cooperation are especially clear in the case of Brazil. India and Brazil have declared inclusive development an imperative and have engineered creative solutions to meet their developmental challenges. But both also face many obstacles to equitable development — some of which can be overcome through mutual learning and targeted bilateral investment.

    ‘Zero Hunger'

    Brazil's “Zero Hunger” strategy, for instance, has been successful in reducing poverty, inequality and hunger by developing profitable small farms and delivering cash to poor families through innovative payment systems. As the debate rages in India about how best to reduce poverty, curb growing inequality and boost agricultural production, Brazil's experience can help.

    Brazil's social schemes are among the world's best targeted and are transparent. They have demonstrated how to streamline the delivery of services across all levels of government. By collaborating with Brazil, India can improve the reach and efficiency of its own, notoriously leaky schemes, including the Public Distribution System, whose losses are estimated to be around 44 per cent a year. There are of course vast differences between the two countries. India's poor are twice Brazil's entire population, for example. But that shouldn't stop India from borrowing some good ideas. It's not necessary for India to indiscriminately adopt cash transfers or other Brazilian schemes to benefit from knowledge sharing. India can leverage its private sector skills to scale up programmes.

    In turn, Brazil can benefit from India's innovators, who are finding novel ways to provide the country's low-income population greater access to products, services and employment that enhance living standards.

    India has produced the world's cheapest car, electronic tablets that cost $50, large, successful retailers who link thousands of rural workers to modern urban markets, and family-sized apartments in cities that sell for $4,200. In the affordable housing sector the long-term opportunities for partnerships with Indian entrepreneurs are particularly significant. Brazilian officials predict a deficit of 23 million homes for low-income families in the next 20 years.

    Fighting AIDS

    In health care, the benefits of an India-Brazil collaboration are already evident. Faced with common diseases and limited resources, India and Brazil have used each other, challenging the international intellectual property regime to combat HIV/AIDS. In 2007, for example, Brazil broke a patent on an antiretroviral drug produced by Merck Pharmaceutical in the wake of rising drug costs. Indian firms were the only producers of the generic version of the drug, and Hyderabad-based Aurobindo ultimately provided Brazil with the active ingredient to produce it. It was estimated that this would save Brazil $237 million through 2012.

    Brazil has taken advantage of their joint campaign for greater access to life-saving medicine and seen an extraordinary decline in HIV/AIDS. Recognising such synergies, India and Brazil have invested $1 million each in joint research on common diseases through the Indo-Brazil Science Council. This alliance can and should be strengthened.

    Health care, poverty alleviation and market-driven social innovation are just a few areas where cooperation between these powers can produce broad social benefits. A formal partnership is needed between Brazil's Ministry of Social Development and Fight Against Hunger and India's Central Planning Commission to institutionalise knowledge sharing and technical cooperation on social protection programmes. Chambers of commerce, including the Federation of Indian Chambers of Commerce and Industry (FICCI) and the India-Brazil Chamber of Commerce, can drive private sector collaboration, connecting Indian and Brazilian entrepreneurs.

    At a time when both countries are beginning to use foreign aid as a diplomatic tool, it is tempting to regard them as competitors. But they should instead recognise each other as strategic partners and pioneers of a new development agenda — one that pragmatically addresses the needs of developing nations. India and Brazil's strategies for inclusive development are complementary and together hold great value.

    Foreign aid provided by BRICS countries has more than doubled since 2005, and the surge is intimately tied to their efforts at reforming global governance. Since the end of World War II, global governance has been a western-led enterprise. The rules that govern aid and influence the development of other nations have been made by the victors of the war and have evolved to rest within a small group of powerful countries — which now face a self-made crisis. With the rise of these new powers, partnerships that once seemed weak are gaining traction. Prime Minister Manmohan Singh should take advantage of his position as host of the upcoming summit to drive a new development agenda.

    ( Estefanía Marchán is a Latin America specialist at Gateway House: Indian Council on Foreign Relations based in Mumbai. This article is a précis of her larger paper, “India and Brazil: New Models for Cooperation,” to be published this month .)


    Brazil and India can benefit from each other's experience for an inclusive development agenda.

    The Hindu : Today's Paper / OPINION : For a new highway, from Rio to Delhi
     
  17. panduranghari

    panduranghari Senior Member Senior Member

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    The best way for BRICs to get through this crisis is to become more insular. China cannot afford to as their economy is export driven, Russia can but their energy supply keeps Europe alive, South Africa is not really a BRIC level country yet, but as they are the dominant African economy, they could still survive down turn elsewhere.

    That leaves Brazil and India. INTERNAL DEMANDS CAN SUSTAIN THE ECONOMY FOR A LONG TIME.
     
  18. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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  19. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    India-Brazil partnership will open more biz opportunities

    Welcoming the President of Brazil Ms. Dilma Rousseff, Indian Union Minister of Commerce, Industry & Textiles Anand Sharma said that India-Brazil partnership will open frontier for business opportunities for both the countries.

    Sharma delivered the Special address at the Business Session with president of Brazil, in New Delhi on Friday.

    "We hope that we will look at each other strengths & share it with each other to generate wealth and employment," the minister said.

    Dilma is on her first state visit to India.

    Sharma in his address announced that the Government has constituted six working groups for strengthening of our economic ties. The working groups constituted are in pharma, mining, services, Infrastructure and food processing.

    Sharma in his addressed emphasized the edge that Indian pharma sector has advantage in this world. He stated that, "Indian pharma companies have emerged as world leaders in producing high quality generic medicines and life saving drugs which are affordable for the people of the developing world. In the true spirit of South-South cooperation India is committed to provide low cost affordable medicines to the poorest of the poor."

    "We would like to encourage our Pharma majors not only to supply low cost, high quality medicines for the people of Brazil as it would bring down the healthcare costs, but also to establish manufacturing facilities in Brazil. It will help in providing affordable health for the people of Brazil, he added."

    "We are assuring friends in Brazil, South America and Africa and all developing countries that in the true spirit of S-S cooperation Indian Industries will ensure that even new generation, new formulations of AVR, drugs are accessible to the poor people at affordable price," Sharma added.

    Speaking on the shift of the global economic fulcrum Sharma said, "The last two decades have seen a transformational change in both our economies and it is a tribute to genius of our people that within this span of time, we are being viewed by the world as emerging economies. It is recognition of this change that we are together on the high table of G-20, deliberating on issues of global economic governance and making our own contribution for global economic stability."

    Minister applauded the visit of Brazilian President and said, "Your visit has given a new momentum to our relationship and I am sure it will provide fresh dynamism to our economic ties."

    'India-Brazil partnership will open more biz opportunities'
     
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  20. Tshering22

    Tshering22 Sikkimese Saber Senior Member

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    No man, Russia's internal market is also tiny compared to its export demands. Especially in energy resources. Russia is as much reliant on external markets as China is. Only difference is, Russia has the "oil and gas" factor which makes it an indispensable supplier to anyone.


    South Africa is damn good dude. Economically it is quite advanced. I don't know about its numbers much but been there and I'd say that it is a more developed version of India (at least the cities). South Africa has a lot of potential and that's why it is BRICS member.

    Brazil is similar to Russia with the natural resources replacing oil and gas. Also, they are technologically well advanced to venture into other areas. But external reliance is also relatively high.

    The most vulnerable to all this is our big Red Panda.
     
  21. TTCUSM

    TTCUSM Regular Member

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    I wonder why nobody mentioned the inroads that ISKCON is making in Latin America.
     

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