The recent visit of India’s External Affairs Minister (EAM) Dr S. Jaishankar to Argentina, Brazil, and Paraguay was met with much fanfare in a part of the world that rarely ever sees the Indian canciller
(Spanish for foreign minister). In fact, the last time India’s EAM made a bilateral visit—not including visits to multilateral summits—to a Latin American country was Yashwant Sinha’s visit to Brazil in 2003
. Jaishankar was received with full honours, and besides meeting with his counterparts, also met the head of state in each country.
One crucial and recent development stands behind Jaishankar’s visit, and has so far, gone unnoticed in the media coverage across India and Latin America.
For most of the 21st
century, the Latin American region has been managed by India’s Minister of State for External Affairs, akin to a deputy foreign minister. That is no longer the case today. The bilateral relationship with three Latin American countries, namely Argentina, Brazil, and Mexico, are now managed directly by India’s foreign minister. The reason—these three countries are part of the Group of 20 (G20), an intergovernmental grouping which India will chair for the first time in 2023. In fact, Jaishankar already visited Mexico in September 2021. As a result of these visits, India’s political engagement with these three countries has deepened considerably over the past year.
Latin America was always relegated to the far end of the three concentric circles that drive India’s foreign policy—with the innermost being the immediate neighbourhood, followed by Asian countries and strategic partners.
This subtle yet significant change in responsibilities also has another consequence. Latin America was always relegated to the far end of the three concentric circles that drive India’s foreign policy—with the innermost being the immediate neighbourhood, followed by Asian countries and strategic partners, and the rest of the world encompassing the last circle. Today, the three Latin American countries, part of the G20, have passed from the outermost circle to the second circle.
What exactly does this mean, besides some changes in nomenclature? It means that New Delhi may pay more attention to Argentina, Brazil, and Mexico than it did before, through more regular meetings at the highest levels. This increased political will could also result in a more robust economic relationship, one which has so far been guided more by India’s private sector than by politicians in the capital—who justifiably have more pressing priorities related to India’s national security, where Latin America plays little to no role.
Graph: The three concentric circles of India’s foreign policy
Latin America: One region or 20 countries?<1>
So, where does this recalibration of political priorities in the corridors of New Delhi leave other Latin American countries that are not part of the G20?
Besides the G20 members in Latin America (Argentina, Brazil, and Mexico), India’s most strategic commercial partner in the region is Venezuela, home to the world’s largest petroleum reserves. Yet, India-Venezuela relations have seen setbacks over the past few years; since October 2020, India has not imported any crude petroleum oil from Venezuela due to the looming threat of American secondary sanctions
(similar to the case of Iran, which also stopped oil exports to India in late 2019). Before the American sanctions came into effect in 2019, Venezuela accounted for up to 10 percent of India’s total oil imports.
Of the remaining Latin American countries, three others stand out as critical suppliers of minerals and hydrocarbons, and as growing markets for Indian exports. These are Chile, Colombia, and Peru, which account for 20 percent of India’s total trade with the Latin American region in the 21st
century. Others like Ecuador, Paraguay, Dominican Republic, and Central American countries like Panama and Guatemala, may not trade as much with India but are nonetheless important destinations for Indian exports and investments in sectors like information technology (IT) and pharmaceuticals. Some examples include India’s HCL, an IT company that employs 2,230 people in Guatemala, and Caplin Point, a mid-size pharmaceutical company with a regional base in Central America and the Caribbean, which accounts for more than 80 percent of the company’s global exports.
Table 1: India’s trade partners in Latin America and the Caribbean
||India’s top 10 trade partners in the LAC region, 2001-2021
||% of India-LAC Trade
||Remaining LAC countries
||Total India-LAC Trade 2001-2021
While India’s private sector often denominates Latin America as one of the regions encompassing their global business portfolios, New Delhi views the individual countries in the region through the prism of its bilateral relationships. This is not particularly due to New Delhi’s own volition—unlike the European Union, the Association of Southeast Asian Nations, the Gulf Cooperation Council, or the African Union, the Latin American region has struggled to establish a unifying regional body that can bring all the countries together under one umbrella.
Instead, Latin America is made up of a motley crew of smaller regional bodies, including Mercosur, the Andean Community, the Pacific Alliance, and the Central American Integration System, to name just a few. Three larger regional bodies, the Union of South American Nations (UNASUR), the Organization of American States (OAS), and the Community of Latin American and Caribbean States (CELAC) have had their own share of issues; UNASUR has all but disbanded, the Washington DC-based OAS is often viewed with hostility as a remnant of a bygone era when the United States (US) wielded far more influence in the region, and CELAC often projects itself as an alternative to the OAS, so much so that the Brazilian president Jair Bolsonaro exited the country’s participation in CELAC in 2020.
Still, New Delhi can and should view Latin America as one region, to develop a foreign policy that caters specifically to the region—one that is anchored in economic diplomacy, where commerce drives the relationship for the benefit of both India and Latin America.
Outcomes of the visit
This visit by India’s EAM focused on a few key points:
- Argentina: India is now Argentina’s fourth-largest trade partner (after only Brazil, China, and the US) and trade is estimated to reach US $7 billion in 2022, even more than India’s trade with Canada or Sri Lanka in 2021. The overwhelming majority (about three-fourths) of Argentina’s exports to India comprise of soyabean and sunflower oil, which found even more salience in 2022 due to the pause in India’s imports of sunflower oil from war-torn Ukraine. Argentina is also keen on joining the BRICS grouping and received India’s support, but it has yet to be formally invited by the remaining members. Although two other significant issues—lithium, an essential component of renewable energy production found in abundance in Argentina, and the HAL Tejas, India’s Light Combat Aircraft, which Argentina is considering importing from India—are sure to have been discussed during the visit, their prospects are long-term and include a plethora of other countries competing for the same goal.
- Brazil: The India-Brazil relationship remains the most important element of India-Latin America ties and the numbers speak for themselves. India-Brazil trade accounts for nearly one-fourth of India-Latin America trade in the 21st century, and Indian investment in Brazil, estimated at US $6 billion, is by far the largest in the region. Besides the usual meetings with ministers and diplomats, Jaishankar also addressed multiple business gatherings in Sao Paulo—away from the capital, Brasilia, which is nestled in the country’s interior—reaffirming the importance of business to the India-Brazil bilateral. The visit to Brazil was a continuation of a long-established dialogue between the two countries, and the fact that it took place just weeks before a presidential election in Brazil is yet another sign that business trumps politics in the India-Brazil bilateral.
- Paraguay: The primary motive of Jaishankar’s visit was to inaugurate the new Indian Embassy in Asunción, Paraguay’s capital. This is the 15th Indian embassy in the region and the 16th diplomatic mission (including India’s consulate general in Sao Paulo). It is the culmination of a proposal from more than a decade ago by India’s Ministry of External Affairs to open a new embassy in Latin America. India-Paraguay commercial ties remain minimal, with bilateral trade at US $235 million in 2021 and just a handful of Indian investments, mostly from the automobile sector.
The increase in political will in New Delhi to take a more concerted look at Latin America bodes well for India-Latin America relations, but we must not forget that it is not a prerequisite for a more meaningful commercial relationship between both sides. India is already amongst Latin America’s top export markets globally, often only surpassed by the US and China, and the region remains a crucial contributor to India’s food and energy security.
The three G20 countries, now managed by India’s EAM, should take full advantage of India’s presidency of the grouping in 2023 and deepen their political relationship with New Delhi. That alone may provide sufficient stimulus to boost India’s relationship with the Latin American region, and perhaps, also push New Delhi to create a more focused foreign policy that consolidates India’s interests in the region.
The Latin American region includes 20 countries, from Mexico to the southern tip of Argentina, most of which are Spanish-speaking, except for Portuguese-speaking Brazil and French-speaking Haiti.
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