Latin America could expand annual trade to India by 42 percent, report finds

Trade between Latin America and India has been multiplying in recent years but has potential to expanding much more, a new study by the Inter-American Development Bank and the Export-Import Bank of India shows.

 

Bilateral trade has grown twentyfold in the last decade to $40 billion. However, trade is concentrated in a few countries and products. Venezuela, Mexico and Brazil accounted for two-thirds of the region's shipments to India – mostly comprised of extractive products such as petroleum and copper. India, for its part, mainly exports industrial manufactured goods to the region but has the potential to export much more.

 

A Bridge between India and Latin America

 

Policy Options for Deeper Economic Cooperation; analysed the trade profiles of the two regions and found the two are highly complementary rather than competitive. The study shows potential for Latin America and the Caribbean to expand its exports to India by $69 billion and for India to add up to $263 billion in additional exports to the region.

 

While those numbers represent the upper limits, more modest but still significant gains could be achieved by enacting reforms aimed at reducing trade costs. In the midterm Latin American and Caribbean (LAC) exports to India could grow by 42 percent, or $7.6 billion in additional goods shipped annually. Indian exports to the region could rise by 46 percent or $8.6 billion in added exports.