Pre-21st Century Relations
Before India gained independence in 1947, connections between India and Latin America were sparse and largely shaped by limited interactions. The trans-Pacific slave trade did see a few Indians migrate to various Latin American countries, albeit in very small numbers. This early movement highlighted the marginal relationship between the two regions prior to the mid-20th century.
In the first half-century following its independence, India’s ties with Latin America remained relatively weak. India's foreign policy, heavily influenced by the principles of the Non-Aligned Movement and its membership in the British Commonwealth, as well as the significant geographical distance from Latin America, created a degree of separation. India's economic engagements with Latin America were minimal during this period; for example, Indo-LAC trade stood at a mere $500 million in 1992. Despite this economic detachment, India played a supportive role in the United Nations by backing Latin American nations in their conflicts with the United States, cultivating a sense of solidarity. This political support often encouraged reciprocal actions from Latin American nations, fostering an atmosphere of goodwill.
The Indian diaspora in Latin America and the Caribbean, particularly groups such as the Indo-Caribbeans, acted as a crucial link between India and the region. These communities not only maintained cultural ties but also contributed to the social and economic fabric of their adopted countries. The experience and knowledge they brought with them helped to bridge the disconnect and laid the groundwork for more substantial bilateral relations in the years to come. This early foundation, though modest, set the stage for evolving interactions that would define Indo-Latin American relations in the coming decades.
21st Century Developments in India-Latin America Relations
In the 21st century, relations between India and Latin America have witnessed remarkable growth and transformation. The diplomatic and economic ties began to deepen significantly following the initiation of the "Focus LAC" policy by India in 1996. This was a strategic move as both regions aimed to liberalize their economies and tap into each other's complementary strengths. India's aspirations to emerge as a leading global player have aligned well with Latin America's desire to pursue a more multipolar foreign policy, moving away from its historically Western-centric orientation. A milestone in this evolving partnership was the hosting of the inaugural India-CELAC (Community of Latin American and Caribbean States) summit in New Delhi in 2012, signaling a formal commitment to fostering mutual cooperation.
Trade relations have also seen noteworthy progress. In 2004, India signed a Preferential Trade Agreement (PTA) with Mercosur, a significant step toward enhancing economic exchanges. Countries such as Peru, Chile, and Colombia have shown keen interest in either joining or expanding their existing PTAs with India in recent years, promoting a broader network of economic cooperation. By 2022, trade between India and Latin America peaked at an impressive $50 billion and is expected to reach $100 billion by 2027. This burgeoning trade flow highlights the increasing exchange of goods and services, with Latin America accounting for one-third of India's car exports. Furthermore, India seeks to improve its energy and food security through strong ties with Latin American nations, which currently supply half of their exports to India in the form of commodities.
Despite the optimistic outlook, challenges remain in enhancing trade dynamics. Weak transport capabilities and relatively high tariffs are identified as major hindrances that continue to restrict the potential of India-Latin America trade. In addition, the competition between India and China for influence and investment in Latin America has become a notable aspect of the geopolitical landscape. While Indian foreign direct investment (FDI) in the region ranges between $12-16 billion, it pales in comparison to China's $159 billion investment. This discrepancy can be attributed to China's longer history of involvement and significant engagement strategies across various sectors in Latin America.
As 21st-century globalization evolves and economies interlink further, it is essential for India and Latin America to strategize collaboratively. The advancement of shared interests, development of infrastructure, and improvement in trade facilitation measures will be vital to unlocking the full potential of their partnership. Overall, the commitment to fostering deeper ties indicates a promising trajectory for the future of India-Latin America relations, with both regions poised to benefit from increased cooperation and mutual understanding.