Relations of Latin America and the Caribbean with : A window of opportunity

Extra-Regional Relations

Regional Meeting on economic and trade relations of Latin America and the Caribbean with nations of the Pacific, India and Africa Caracas, 9 and 10 October 2014 SP/RRRECALCPIA/DT N° 2-14

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Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity

C O N T E N T S

FOREWORD

EXECUTIVE SUMMARY 3

INTRODUCTION 5 1. Background 6 2. India within the international context 6 3. India’s basic profile: Territory, population and income 7 4. India’s economy and competitiveness 9

I. RELATIONS BETWEEN INDIA AND LATIN AMERICA AND THE CARIBBEAN 14

II. TRADE AND INVESTMENT 16 1. India’s 17 2. Doha Round negotiations: Areas of common interest 21 3. Imports 26 4. Exports 27 5. Investment 28

III. INDIA’S INTERNATIONAL COOPERATION 32 1. Coincidences in regional and multilateral organizations 32 2. Education and Innovation 38 3. SMEs 39 4. Tourism and transport 39 5. Environment and energy 40

IV. AREAS OF OPPORTUNITY AND RECOMMENDATIONS 42 1. Economic-trade area 42 2. Technical Cooperation 45 3. Tools to promote relations between India and Latin America and the Caribbean 46

ANNEX I. DIPLOMATIC RELATIONS BETWEEN INDIA AND LATIN AMERICA AND THE CARIBBEAN 49 ANNEX II. COOPERATION AGREEMENTS ENTERED INTO BETWEEN INDIA AND LATIN AMERICAN AND CARIBBEAN COUNTRIES 53 ANNEX III. AGREEMENTS SIGNED WITHIN THE FRAMEWORK OF IBSA 59 ANNEX IV. INDIAN COMPANIES WITH THE LARGEST NUMBER OF SUBSIDIARIES BY SECTOR 63 ANNEX V. IMPORTS MADE BY LATIN AMERICA AND THE CARIBBEAN FROM INDIA AND THEIR POTENTIAL IN LAC MARKETS, 2013 67 ANNEX VI. EXPORTS FROM LATIN AMERICA AND THE CARIBBEAN TO INDIA AND THEIR POTENTIAL IN THE INDIAN MARKET, 2013 75

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ANNEX VII. POSITION OF LATIN AMERICA AND THE CARIBBEAN BY NUMBER OF SUBSIDIARIES AND BY SECTORS, AS DEVELOPING COUNTRIES RECEIVING INVESTMENTS FROM INDIA 83 ANNEX VIII. POSITION OF LATIN AMERICAN AND CARIBBEAN COUNTRIES BY SECTORS AND BY NUMBER OF SUBSIDIARIES IN INDIA 89

TABLES

TABLE 1. Consolidated and applied tariffs (MFN) in selected countries and regions 20 TABLE 2. India’s trade agreements 23 TABLE 3. Latin America and the Caribbean: Total trade and with India 24 TABLE 4. Latin America and the Caribbean: India’s main trading partners 26 TABLE 5. Latin America and the Caribbean: Sectors that recorded FDI 31 inflows in India, 2012 TABLE 6. Binational trade chambers between India and Latin America and the Caribbean 32

CHARTS

CHART 1. Political division of the Indian Union 7 CHART 2. Population pyramids of and India, 2014 and 2050 8 CHART 3. Human Development Index 9 CHART 4. Composition of GDP by sectors in selected regions and countries (2010, 2030, 2050) 11 CHART 5. Inflation, annual changes in consumer prices: India and world 11 CHART 6. Fiscal deficit as percentage of GDP, India and selected economies in Latin America and the Caribbean 12 CHART 7. Subindexes of the Global Competitiveness Indicator: India 13 CHART 8. Subindexes of the ease for doing business index in India 13 CHART 9. India’s disaggregated trade facilitation index by subindexes 17 CHART 10. India’s trade flows and annual growth 18 CHART 11. Trade among India, and 2013 18 CHART 12. India’s main trade partners 19 CHART 13. Consolidated and applied tariff averages: India and the world (%) 20 CHART 14. Trade flows of India’s major trading partners in Latin America and the Caribbean, 2013 25 CHART 15. Main developing economies by investments abroad 29

ACRONYMS 95

BIBLIOGRAPHY 97

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity

FOREWORD

This study on relations of Latin America and the Caribbean with India has been carried out in compliance with Activity “Analysis of the economic and trade relations between Latin America and the Caribbean and the Pacific, India and Africa,” of the Work Programme of the Permanent Secretariat for the year 2014.

This activity responds to the need to systematize information and propose actions to promote and strengthen the diversification of external economic relations of Latin America and the Caribbean with emerging regions, such as India, China, nations with participation in the Pacific basin and the African continent.

In this regard, after highlighting India’s role at the international level in the economic and cooperation areas, this study describes the status and significance of its relations with Latin America and the Caribbean. It concludes by presenting an analysis of the areas in which opportunities exist for expanded, diversified and deepened relations.

The Permanent Secretariat expresses its appreciation and gratitude to Dr. Luz María De la Mora for her valuable contribution as consultant in drafting this document.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 3

EXECUTIVE SUMMARY

India, one of the emerging markets in South Asia, is looking for open spaces to ensure a greater presence in the international system. With 3.2 million Km2, India is the seventh-largest country in the world by extension and has a population of 1.230 billion people, which represents more than 16% of the population and about 15% of the labour force in the world (, 2014B).

India is expected to consolidate as the second-largest economy in the world by 2055 (USD PPP), only after China (Chanteau & Dellink, 2011), and to become in the coming decades one of the main growth poles in the global economy.

Since the inauguration of the Government of Narendra Modi in May 2014, Latin America and the Caribbean have noticed India’s interest in deepening its relations with the region. The importance that India has and will have in the international context makes it essential for the Latin American and Caribbean countries to ensure a greater rapprochement with this nation in certain areas, such as trade, finance, economic development and , topics discussed in this document.

In order to contribute to strengthening collaboration between Latin America and the Caribbean as a region and India, SELA has embarked on the task of preparing this study with the aim of offering proposals for lines of action that could help the region develop a targeted and mutually benecifial policy of rapprochement with India.

The first section of this document is an analysis of the status of India in macroeconomic, development and political terms. It also presents a comprehensive overview of the diplomatic and political relationship between Latin America and the Caribbean and India at the bilateral and regional levels. There are indicators that show increased interest by both parties in strengthening ties. In fact, as shown in this study, the number of embassies of both parties and visits by Latin American and Caribbean presidents to India has soared since 2000.

The second part analyzes trade and investment relations between India and the region in terms of existing exchanges, trade agreements, investment agreements and the participation of the private sector through chambers of commerce. It is clear that both India and Latin America and the Caribbean have made some progress on the path towards rapprochement through trade and investment, but there is still a long way to go. As explained in this document, the participation of India in international trade has been dominated by the services sector, while its agricultural sector remains protected and inefficient and its manufacturing sector fails to provide employment to a young and mostly rural population. In addition, some areas of opportunity are identified to boost trade and investment and meet India’s need for natural resources that Latin America and the Caribbean has to offer. In this section, we identify the profile of trade in goods and explore the potential to open up new opportunities for imports and exports in both directions.

The third section makes a review of the status and potential of international cooperation for development between both parties. Emphasis is made on coincidences of India and Latin America and the Caribbean in various international organizations and forums as a basis for a closer and deeper relationship. In addition, some areas of opportunity are identified and an analysis is made of cooperation between India and Latin America and the Caribbean in the areas of education and innovation; SMES; tourism and transport; and environment and energy. It is evident that the Latin American and Caribbean region has an opportunity to deepen its relations with India through technical cooperation.

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Finally, this document includes recommendations on lines of action in the economic-trade and technical cooperation areas that may contribute to closer relations among Latin American and Caribbean countries as a region and individually. This section also offers tools for SELA to assist member countries in their efforts to promote relations with India.

With this document, SELA aims to provide information and support the analysis of the relationship between India and Latin America and the Caribbean, as well as propose mechanisms to strengthen such relations in both directions. In addition, the study is expected to inform the Member States of SELA about the areas that may contribute to greater rapprochement between the two parties. SELA can assist in this task and provide for an inclusive bi-regional relationship with the participation of all Latin American and Caribbean countries in specific areas, thus enriching and strengthening the development of a regional strategy.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 5

INTRODUCTION

In the last decade, relations of Latin America and the Caribbean with India have experienced significant changes. Political and economic approaches have increased significantly as a result of State visits, increase in trade and investment flows and a better rapprochement in multilateral forums.

Although in recent decades China has outperformed India in almost all dimensions of development, making it the main business target of several Latin America and Caribbean countries, there are also signs that India will have a more dynamic economic development in the coming decades and could beat China in the long term due to the size of its economy and demographic bonus. The economic and political leaders in India are already considering their country a fledgling power (Varun Sahni, 2013). In this context, Latin America and the Caribbean should seek different ways of rapprochement.

India is the second most populous country and the largest democracy in the world, in addition to being multicultural, with different religions and ethnic groups. This great diversity has contributed to the exchange of experiences and the acquisition of new skills in order to maintain the integrity of the Indian Union. Children in Kerala speak Malayalam with their family and community members; learn Hindi and English, as they are the languages of instruction in their school; and have the opportunity to learn a new language as part of their education, usually French or Portuguese. Current and potential human capital in India could be one of its main assets, which is worth highlighting in a global economy that increasingly depends on knowledge.

At the same time, India has large and important challenges ahead in all areas of development. Most of its population still live in poverty and have problems to access health, education and basic services. The country needs major investments in infrastructure to support its development.

India’s economic growth also involves challenges in the environmental and energy supply areas. In macroeconomic terms, the country suffers from inflation and ongoing fiscal deficits. In addition, the public administration faces an excessive regulation and a heavy bureaucracy that occasionally is inefficient and corrupt.

The installation of the new Government in India, as a result of elections in April and May 2014, is an ideal time to rethink the way for a rapprochement between China and Latin America and the Caribbean. The new Indian Government of Prime Minister Modi has shown willingness and desire to strengthen and diversify their international relations, especially with emerging and developing nations. Proof of this is his recent participation in the Meeting of the BRICS in Brazil and the Summit with the leaders of . This desire for rapprochement with Latin America and the Caribbean should find resonance in the different countries of Latin America and the Caribbean, and in the region as a whole.

This document analyzes the potential for cooperation between India and the countries of Latin America and the Caribbean and highlights some areas of opportunity to promote the relationship between both parties, focusing on the productive and technical cooperation aspects. This is expected to contribute to the definition of an agenda and lines of action towards greater collaboration, thus increasing contacts in specific areas.

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1. Background

From 7 April to 12 May 2014, more than 550 million Indians (66% of the electorate) voted to elect the members of the Congress and the Prime Minister of the Union. The opposition Bharatiya Janata Party (BJP) and its leader Narendra Modi claimed victory. The results were historic, because they not only ended a decade of the Congress Party in power, but for the first time in more than 30 years, a single party achieved the majority in the Lower House (Lok Sabha). The BJP won 282 out of 543 contestable seats and, with the votes of its allied parties, obtained an absolute majority of 334 seats.1

Modi and his party were elected in a context of inflation, scandals of corruption and low economic growth compared with previous years.2 During his campaign, the main slogan was “less government, more governance”, with which he promised to reduce bureaucratic costs, modernize the labour regulation, promote the manufacturing industry and accelerate the construction of roads and industrial corridors. The agenda for his new government focuses on reviving the flow of investment, essential for economic growth and job creation; establishing a framework for monetary policy and fiscal consolidation that ensure low levels of inflation; and cleaning up public finances through fiscal reform. Thus, the Modi government plans to return to annual growth rates of 7% to 8% in the medium term (EY, 2014).

Modi has shown an interest in expanding the projection of India in the world and improving its international relations. In his first days as Prime Minister, Modi has taken the initiative to improve strained relations with neighbouring countries. The Indian Prime Minister invited his Pakistani counterpart, Nawaz Sharif, to attend his inauguration. He promised President Mahinda Rajapaksa of – a country with which India has had strained relations as a result of the conflict with the Tamil ethnic group – to free 85 prisoners of this country who were in prisons in Odisha and Andra Pradesh. As a gesture of goodwill, the Government of Sri Lanka freed all Indian prisoners in its custody. Modi has also met with his counterpart in Bhutan during a State visit to Brazil in June and with Chinese President Xi Jinping during the Sixth Summit of the BRICS.

During his tenure as Head of Government in the province of Gujarat, Modi was one of two governors who agreed to meet with Latin American ambassadors in their efforts to explore commercial opportunities. This could be an indication of the new Prime Minister’s vision of closing ties not only with its close neighbours, but also with far regions, as a way of diversifying and taking advantage of business opportunities (Chaudhury, Roy, 2014). This situation is conducive to further rapprochement between Latin America and the Caribbean and India and is an opportunity that should be explored to find an approach in specific areas for a deeper relationship.

2. India within the international context

Historical and cultural ties between India and Latin America and the Caribbean have traditionally been scarce. As a result of its membership of the British Empire, India has a British tradition that has enabled more contacts with the English-speaking Caribbean than with the rest of

1 The hegemonic Congress Party, which ruled for almost the entire period of independent India, also obtained a historic result with only 44 seats. 2 During his tenure in the province of Gujarat, Modi was characterized by his quick and decisive capacity to take action and promote aggressive reforms that benefited the private sector and attracted an important flow of investment (Chilkoti, Wildau, Eley, 2014). Several analysts have compared Modi with Mexican President Enrique Peña Nieto and Japanese Prime Minister Abe in terms of his will and political capacity to promote reforms (Wolf, 2014). Given his majority in Congress, Modi could be considered a potential authoritarian reformer, as Lee Kuan in Singapore or other leaders in South Korea, Taiwan and China (Mallet, 2014B). Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 7 the countries in the region, especially through their respective memberships of the . Although relations between Latin America and the Caribbean and India have been limited in some areas, the region is increasingly aware of the dimension that India takes at the international level as a political actor, in the international trade in goods and services as an investor, and in the development of innovations and cutting-edge technology, to mention some items. The greater presence of India in the world forces Latin America and the Caribbean to seek ways of approaching and to know in greater depth the reality of India so as to identify areas of common interest, areas where the relationship can be strengthened and those where differences are clearly evident. In this section, we offer a brief description of India in its economic and social dimensions.

3. India’s basic profile: Territory, population and income

Among the emerging economies, India stands out for its territorial dimension, size of its economy, economic growth and, mainly, its population. India is a Federation consisting of 29 States3 and 7 territories, one of which is the capital, Delhi. With 3.2 million Km2, India is the seventh-largest country in the world and has a population density of more than 400 inhabitants per Km2. The country is home to 1.230 billion inhabitants, which represents more than 16% of the world’s population. Only China surpasses India’s population, followed far behind by United States, which ranks third with 313 million people. One of every twelve inhabitants of the world resides only in the Ganges basin (World Wide Foundation, 2014).

CHART 1 Political division of the Indian Union

India has nearly 15% of the world’s labour force and a demographic bonus, with 65% of the population being 15 to 65 years of age (World Bank, 2014B). The only country to be comparable with India in terms of this indicator is China. However, the demographic structure of India shows a younger country with higher population growth rates. It is possible to see the difference between

3 As of 2 June 2014, the state of Andhra Pradesh was divided into Andrha Pradesh and Telangana. Before that date, the Indian Federation included 28 states.

Permanent Secretariat Extra-Regional Relations 8 the two Asian countries in the population pyramids. As shown in CHART 2, according to estimates by the US Census Bureau, 18% of inhabitants in China will be less than 20 years old by 2050, while 49%, one out of two, will be more than 50 years. In the same year, a quarter of India’s population (26.6%) will be less than 20 years of age and 32.5% will be more than 50 years.

Although the size of its population provides it with great potential for growth, it is also one of its main challenges. India needs to create nearly 13 million jobs a year to incorporate the population joining the labour force. Today, more than 90% of Indian workers operate in the informal market. That is, out of a total of 500 million workers, a little more than 40 million have formal employment and more than half of those jobs are in the public sector (Pipitone, 2011B).

CHART 2 Population pyramids of China and India, 2014 and 2050 Ages and millions of inhabitants

Source: US Census Bureau (2014).

In addition to job creation, the Indian population demands basic services that the State must provide. To determine such challenge, an analysis is made of the Human Development Index (HDI) created by the Development Programme (UNDP), which incorporates health, education and income indicators.4 CHART 3 shows the place of India, based on its HDI, between the country with the greatest human development in Latin America and the Caribbean, Barbados (0.82), and the country with the lowest index, (0.45). The HDI of the major Latin American and

4 The HDI is composed of three sub-indices: education, health and income. Education is based on average years of schooling for adults aged 25 years and expected years of schooling for a child of school entering age. Health is based on life expectancy of a particular country, using a minimum value of 20 years and maximum value of 83.5 years. As for income, the UNDP uses the gross national income per capita by purchasing power parity, adjusted to a logarithmic scale to reflect the diminishing returns from a person’s income. Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 9

Caribbean economies is between 7 and 8, while India’s is lower than that of all Latin American and Caribbean countries except Haiti (UNDP, 2013). India is very heterogeneous, with some states boasting high or very high human development indices – Kerala, Himachal Pradesh and Goa – and others concentrating the greatest part of the population and reporting a level of development ten points lower than Haiti and comparable with the lowest levels of development in the world. In the latter group are Chhattisgarh, Odisha, Bihar, Madhya Pradesh and Jharkhand.

CHART 3 Human Development Index India and selected Latin American and HDI by state in India (2008) Caribbean countries (2012)

Source: UNDP (2014) and Institute of Applied Manpower Research and Planning Commission of the Government of India (2011).

Related to the level of development, extreme poverty is a phenomenon that affects a significant part of India’s population. According to the latest data released by the World Bank (2014B), 68% of the Indian population lives with less than US$ 2 (PPP). The difference between the Latin American and Caribbean region and India as regards this indicator is significant, not only in percentage points, but also in absolute terms. Hondurans living with less than US$ 2 (PPP) amount to nearly 2.5 million, almost 30% of its population. In absolute terms, Brazil is the country in Latin American and the Caribbean with the largest number of people living at the national poverty line, approximately 21 million. In India, more than 800 million people live with less than US$ 2 (PPP) daily, which is an important and urgent challenge for the development of this country.

4. India’s economy and competitiveness

In less than 20 years, India has become “an at the regional and global levels, with a growth rate of 6.5% to 8% during the last 10 years,” making it one of the economies with the most dynamic growth (Mesquita, 2010). India’s GDP totals US$ 1.8 trillion (World Bank, 2014B). In the first half of the 20th century and under the British colonial rule, the economy grew approximately 1% annually. India is still a rural country, where about 60% of the population works in agriculture. However, despite efforts, this sector reports an extremely low productivity, with only 50% to 60% of the potential productivity in most crops, as a result of bad decisions in adopting technologies and lack of supporting infrastructure. The share of agriculture in India’s GDP has declined to less than 14%, while in 1950 it represented more than 55% of GDP (Pipitone 2011).

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Since its independence, India boosted its industrialization, which contributed to the gradual increase of its growth rates from 3.5% between 1950 and late seventies to 5% in the 1980s, a lower performance than Mexico or Brazil in the same period and under a very similar economic model (Pipitone, 2011B). In 1991, the import-substitution model showed signs of exhaustion, and after the twin crises in the financial and current account sectors, India opened its economy to international trade and investment. Since then, the Indian economy has experienced a significant and sustained economic growth – above 6.5% on average annually – and the services sector has taken a dominant role.

The services sector makes a significant contribution to the GDP (56.5%), trade and attraction of foreign direct investment inflows (World Bank, 2014B). The dynamism of the sector has made India the 7th importer and 8th exporter of services in the world. This has been possible thanks to a top- ranked public undergraduate education. India’s workforce of trained, English-speaking engineers with competitive salaries has made it possible for the country to attract significant FDI inflows, especially in the information technology and software development sector. To continue growing, the services industry requires staff with certain skills, which is not the main characteristic of most of the rural population migrating to the cities in search of work.

In contrast to the services sector, the manufacturing sector has failed to achieve the same dynamism. Despite its attempt to boost the country’s industrialization, the manufacturing sector represents only 14% of India’s GDP, standing out the share of the steel sector (India is the world’s fourth-largest producer). In order to further drive manufacturing, the Government of India launched in 2011 the National Manufacturing Policy with the aim of enhancing the share of manufacturing in GDP to 25% by 2025 and creating 100 million jobs, which are essential to absorb the rural population that migrates to the cities (Bhunia, 2014).

India’s economic growth and demographic bonus make the country a very attractive market for its current and potential consumption of goods and services. In the coming decades, India is expected to be one of the main growth poles of the global economy. According to the Organization for Economic Cooperation and Development (OECD), India will maintain an average annual growth rate of 7.2% in the period 2010-2020, 6.2% between 2020 and 2030, and 4.8% between 2030 and 2050. Based on this, India could become the second-largest economy in the world (USD PPP), just below China, even though it will report higher average growth rates. The OECD said 50% of India’s growth will be driven by the supply of capital, and one third of it by labour productivity (Chanteau & Dellink, 2011).

Despite the success achieved over the past two decades, some factors could affect the growth of India in the future (OECD, 2014). Like other emerging economies, the growth of India’s economy has slowed down, and internal factors such as inflationary pressures and growing fiscal and current account deficits represent challenges in the short term.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 11

CHART 4 Composition of GDP by sectors in selected regions and countries (2010, 2030, 2050)

Canada Korea Oceania Russia USA EU 27 Rest of Brazil China IND India Mideast Mex ZAF ROW and and Europe and N. Japan EFTA Africa Transport and Other Energy-intensive Services Agriculture construction industries industries Source: Chanteau and Delink (2011).

India’s inflation (measured according to changes in consumer prices) is about four times greater than the world average. Since 2004 and with the exception of 2010, consumer prices have steadily increased to 10.9% in 2013.

CHART 5 Inflation, annual changes in consumer prices: India and world

World India Source: World Bank 2014.

As regards public spending, India reports an annual fiscal deficit as percentage of GDP, which is high compared with the economies of Latin America and the Caribbean. While the region’s economies also report a negative fiscal balance, the Asian country has a deficit as percentage of GDP that is double that of the major economies in the region, as shown in CHART 6.

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CHART 6 Fiscal deficit as percentage of GDP, India and selected economies in Latin America and the Caribbean

Source: Prepared by the author with data from the World Bank.

Although the last global financial crisis has had a marginal impact on growth rate, the relative weakness in the aforementioned macroeconomic indicators has turned India into one of the countries with less manoeuvrable fiscal and monetary policies to cope with an eventual crisis and sustain growth (The Economist, 2012).

India has made significant progress as regards the competitiveness of its economy after the 1991 reforms. In fact, according to the Global Competitiveness Index of the World Economic Forum (2013), India ranks 60th among 148 countries with a score of 4.3 on a 1-7 scale. Comparatively, India’s strengths include the market size (3rd) and the financial market development (19th). India shows weaknesses in its macroeconomic stability (110th); health and primary education (102nd); labour market efficiency (99th); technological readiness (98th), and higher education and training (91st). Several variables affect the competitiveness of the country, such as high business costs of , corruption, inflation, diseases as and , high infant mortality, the still low Internet access, the low participation rate of women in the workforce and trade barriers (World Economic Forum, 2013).

Based on a survey conducted by the World Economic Forum (2013) to Indian business leaders, the most problematic factors for doing business in the country are poor infrastructure, bureaucracy, corruption and tax regulations.

According to the International Competitiveness Index 2013 of the Mexican Competitiveness Institute (IMCO), which analyzes the ability of the 46 major economies in the world to attract and retain talent, India ranks 42nd. Some features, such as the size of its economy, population and growth, place the Asian country in a good position as regards the economy (15th) and factors of production (23rd) sub-pillars. However, factors such as high protectionism through tariff and non- tariff barriers, excessive regulation, corruption and paralysis of the political system affect the levels of competitiveness of the Indian economy as a whole. As for the inclusive, prepared and healthy society sub-pillar, India is also the worst-ranked country, since only 35% of the population has access to sewers, 35% of the population suffers from illiteracy (the highest rate among 46 Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 13 countries), the average schooling is 4.5 years, pre-school coverage is 55%, and infant mortality is the highest with 61 deaths for every thousand children under 5 years of age. In terms of gender equity, India is also far behind, because only 28% of women older than 15 years forms part of the economically active population (IMCO, 2013).

CHART 7 Subindexes of the Global Competitiveness Indicator: India

Source: World Economic Forum. The Global Competitiveness Report, 2013.

For its part, the World Bank, in its Doing Business 2014 report, shows that India fell three positions between 2013 (131st) and 2014 (134th among 189 economies). Given its poor performance on the ease of doing business with other countries, dealing with construction permits, starting a business, enforcing contracts and paying taxes, India needs to take action to register some improvement in such categories.

CHART 8 Subindexes of the ease for doing business index in India

Source: World Bank, Doing Business, 2014.

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The institutional weakness, as reported by the World Economic Forum and the World Bank, poses an additional challenge in terms of corruption. According to Transparencia Internacional, India ranks 99th among 177 countries for perceived levels of corruption. During 2010, 54% of users of public services [in India] paid bribes, compared to 31% in Mexico, 9% in China and Japan, 4% in Brazil and 2% in South Korea (Transparencia Internacional, 2013).

The country also continues to face important development challenges, on which its long-term growth and ability to become a regional and world power will depend.

I. RELATIONS BETWEEN INDIA AND LATIN AMERICA AND THE CARIBBEAN

Since its independence, India has played a significant role in multilateral organizations and has had a major presence in the Southeast Asia region. In its discourse, India has promoted the creation of groups and partnerships among developing countries, inside and outside international organizations, to demand fair treatment and thus reflect the asymmetry of economic and institutional capacities in international relations. The economic development it has undergone in recent decades, as a result of its structural reforms launched in 1991, has barely modified this discourse. However, the international projection of India has been expanded. The Asian country is no longer only a , but it has also begun to occupy a space on the world stage. “... knowing how the world develops and grows is of vital importance for India” (India, Ministry of External Affairs, 2013).

Considering its greater international projection, India has aimed to increase its relations with Latin American and Caribbean countries through the development of a network of mechanisms for political dialogue and cooperation agreements in various areas, which have further institutionalized its relationship with the region as a whole and each Latin American and Caribbean country. In addition, the number of visits paid by Latin American and Caribbean presidents to India has been greater since 2000 than from 1947, when India achieved independence, to 2000 (Heine, 2012).

Diplomatic relations between India and Latin America and the Caribbean offer a first sign of the importance and attention that countries give one another. Over the last decade, a very important change has been reported as regards the presence of Latin America and the Caribbean in . An example of this is the number of embassies in the Asian country, which grew from 12 in 2003 to 18 in 2008. As for India’s diplomatic missions in the region, the number increased from 7 to 14. India is present in South America, Central America and the Caribbean through its various foreign service institutes. India’s diplomatic representatives in Latin America and the Caribbean, as well as Latin American and Caribbean countries that have embassies, consulates or high commissioners in India, are included in Annex I. The countries in the region that have some kind of representation in India total 24. The cities in India with the higher number of embassies and consulates are New Delhi, Mumbai and Calcutta.

In addition to diplomatic representations, India has established a network of more than 70 cooperation agreements with 21 countries of Latin America and the Caribbean. Brazil is the country with which India has managed to develop a closer relationship in the region. Annex II shows the significant number of agreements, treaties and memoranda of understanding signed in the last decade in different areas of cooperation. Following is a list of countries with which India has established agreements and the topics they dealt with.

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has established agreements with India on economic cooperation, customs matters, nuclear energy, and promotion and protection of investments. In addition, an agreement to facilitate consultations between foreign service institutes remains in effect since 2000.  Bahamas signed a bilateral cooperation agreement in 2006 and a Memorandum of Understanding for consultations between Ministries of Foreign Affairs in 2005.  The Plurinational State of Bolivia signed an agreement on cooperation in cultural matters in 1997.  Brazil has established most of its agreements since the early 2000s. Before that time, the country had a Memorandum of Understanding on consultations between Ministries of Foreign Affairs. In the past 14 years, Brazil has signed a Memorandum of Understanding for cooperation in the area of ethanol fuels and agreements on audio and video co-productions, defence matters, and lucrative occupations for relatives of members of the consular service, among others.  Chile, since 2000, has considerably strengthened its relations with India through cooperation agreements. In recent years, Chile has signed agreements on education, sports, science and technology, agricultural research, geology and mineral resources, energy, air services, animal health and phytosanitary and zoosanitary controls. They supplement the existing agreements on cultural cooperation and consultations between Ministries of Foreign Affairs, established between both countries in the early 1990s.  has also increased the number of cooperation agreements with India in the last decade. Among the main topics addressed are double taxation and prevention of tax evasion, transport systems and urban transport planning, academic cooperation, visa exemption for diplomatic passports, and cooperation between foreign service institutes.  The signed a framework agreement for the establishment of a joint commission for consultation, cooperation, and coordination with India, which demonstrates the desire of the Asian country to establish relations with regional organizations as a way to get closer to the Latin American and Caribbean region.  Cuba established a Memorandum of Understanding for cooperation between foreign service institutes in 2002.  Dominica signed an agreement for the creation and construction of a centre of excellence in the field of information technology in 2011.  has established agreements on cultural cooperation, cooperation between foreign service institutes and regulation of lucrative occupations for relatives of members of the consular service.  El Salvador signed a Memorandum of Understanding for cooperation between foreign service institutes in 2004 and an agreement on scientific and technological cooperation in 2012.  so far has signed a Memorandum of Understanding for cooperation between foreign service institutes.  Haiti has a framework agreement to promote bilateral cooperation in different areas.  Mexico has signed agreements on cooperation in customs matters to avoid double taxation and prevent tax evasion, promotion and reciprocal protection of investments, cooperation between Ministries of Foreign Affairs, as well as treaties on extradition and mutual assistance in criminal matters.  Nicaragua signed an agreement on cultural cooperation in 1986.  Panama signed two agreements in February 2001 for cooperation in the fields of culture and education and cooperation between foreign service institutes.

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has also established agreements with India on geology and mineral resources, science and technology, visa exemption for diplomatic passports and cooperation between foreign service institutes.  Dominican Republic has a Memorandum of Understanding for consultations and review of bilateral relations between Ministries of Foreign Affairs.  has increased cooperation with India in recent years through cooperation agreements. In 2012, it signed agreements on air services, cultural exchanges, technical and scientific cooperation and consultations between Ministries of Foreign Affairs.  Uruguay signed agreements to avoid double taxation and prevent tax evasion, protect investments and issue visa exemption for diplomatic passports.  The Bolivarian Republic of Venezuela signed in 2005 a Memorandum of Understanding for the establishment of a joint commission, as well as agreements on cooperation between foreign service institutes and Ministries of Foreign Affairs and in the hydrocarbon sector.

Cooperation agreements show the degree of institutionalization of India’s relations with Latin American and Caribbean countries. The heterogeneity of these relations, which are not always linked to the size of the economies, is notorious. Such heterogeneity in cooperation relations also serves as example for countries with less deep relations of the opportunities and benefits the relationship with India has to offer.

II. TRADE AND INVESTMENT

Even though India is one of the major economies in the world, others of lesser size as South Korea, Singapore, Holland and Hong Kong have greater presence in international trade flows. Since 1991, India has launched an aggressive programme for systemic reforms that marks a decisive break from its inward-oriented development model, which remained in force for more than four decades, and a gradual opening-up to foreign investment and trade in goods and services.

Despite its opening, India still maintains high tariff and non-tariff barriers that limit its trade with the world. India still faces structural obstacles to trade. The World Bank’s Doing Business report (2014) places India at 132nd position among 189 countries on the trading across borders sub- index, behind other emerging economies and countries in Latin America, such as Mexico and Brazil. According to the World Bank, an average of 11 documents, 20 days and US$ 1,250 is required to import a container to India, which is slightly better than the average in the South Asia region, but low compared with other emerging economies.

The Heritage Foundation (2014) places India at 120th position among 178 countries for economic freedom, with trade freedom being the indicator in which India has reported more progress in the last 20 years. According to this organization, the achievements of India still remain limited due to high tariffs and non-tariff barriers (Miller, Kim Holmes, 2014).

As for goods market efficiency, the sixth pillar of the Global Competitiveness Index released by the World Economic Forum (2013), India is ranked 61st (out of 148) in prevalence of trade barriers, 128th in trade tariffs and 88th in burden of customs procedures. In a report on trade of the World Economic Forum (2014), India stands at 96th among 138 countries on the enabling trade index ranking. India’s strengths, which facilitate trade flows, are the availability and quality of transport infrastructure and services. In addition, the country has a poor performance in the availability and use of information technologies and access of both, foreign products to its market and Indian Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 17 products to foreign markets. In the market access indicators, India’s performance is low even by regional standards.

CHART 9 India’s disaggregated trade facilitation index by subindexes

Source: World Economic Forum. The Enabling Trade Report (2014).

While domestic market access is measured by tariff barriers, Indian exporters have found it difficult to access foreign markets due to high tariffs. India’s products do not enjoy a favourable access, because the Asian country does not offer a favourable access to other countries.

According to perceptions of leaders from the private sector in India (World Economic Forum, 2014), the major obstacles to export are access to imported inputs at competitive prices; high cost of delays produced by domestic transport, and technical requirements requested by other countries. In the case of imports, procedures, tariffs and corruption at customs were the most frequently mentioned barriers.

1. India’s international trade

The liberalization of the Indian economy has changed the Asian country’s trade relations with the world. During 2013, India became the 12th largest importer in the world with a demand of US$ 477.3 billion and the 16th largest exporter with sales in the amount of US$ 336.6 billion (compared to the 30th place in 2002 with a share of 0.8%). From 2001 to 2013, the growth of India’s trade with the world was multiplied by more than eight times, which represented an annual growth of 20.5%.

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CHART 10 India’s trade flows and annual growth Billions of dollars

Source: International Trade Centre (2014B) and WTO (2014D)

Based on the value of its exports and imports, India’s trade resembles that of the major Latin American and Caribbean economies: Brazil and Mexico. Both India’s imports and exports have grown faster than Mexico’s and Brazil’s, especially after the 2008 financial crisis. As of 2009, the value of India’s imports has been greater than that of its Latin American counterparts. Even though Mexico is the largest exporter in Latin America and the Caribbean and reports more exports than India, the value of Indian exports could soon exceed that of Mexican exports if the current trend is maintained.

CHART 11 Trade among India, Mexico and Brazil in 2013 (billions of dollars)

Imports Exports

Source: Prepared by the author with data from the International Trade Centre (2014B).

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Latin America and the Caribbean and India are not relevant trading partners as destinations for exports or sources of imports (ECLAC 2012, p. 11). The only exception is the Bolivarian Republic of Venezuela, which is among India’s main partners based on its oil exports to the Asian country. In 2013, the main destinations of Indian exports, by order of commercial value, were the United States, the , China, Singapore and Hong Kong. Together, these countries buy 35% of products exported by India. As for imports, 36% of products come from China, , the United Arab Emirates, Switzerland and the United States.

CHART 12 India’s main trade partners

Source: Prepared by the author with data from the International Trade Centre (2014B)

India’s imports are concentrated in a few products. Nine chapters of the harmonized system represent 80% of India’s imports, namely: mineral fuels, mineral oils and distillation products; pearls, stones and precious metals; machinery; electrical and electronic equipment; organic chemicals; products not else specified; iron and steel; plastics and articles thereof, and animal or vegetable fats and oils. Only the first two categories account for 54% of Indian imports.

For their part, exports are more diversified. Approximately 80% of the country's total exports correspond to 22 chapters of the harmonized system. Once again, the first two chapters are mineral fuels, mineral oils and distillation products; and pearls, stones and precious metals, which account for 33% of Indian exports.

Trade relations between India and Latin American and Caribbean countries are conducted within a multilateral framework, as they are governed mainly by the (WTO) agreements. India is a founding member of both GATT and the WTO. Its international trade is regulated by the WTO agreements and is subject to dispute settlement mechanisms to resolve trade disputes among members of the organization. At present, 73.8% of India’s tariff lines have a consolidated tariff under the WTO. The average consolidated tariff of India is 113.1% for agricultural products and 34.5% for non-agricultural products. The average tariff in 2012 was 33.5% for agricultural products and 10.4% for non-agricultural products, which means that the Indian economy is highly protected and trade flows are difficult to achieve.

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TABLE 1 Consolidated and applied tariffs (MFN) in selected countries and regions Non- Non-Agric. Agric. Agric. Agric. Country Lines Consolidated Consolidated Consolidated MFN MFN MFN / group covered % Ave. Ave. Ave. Ave. Ave. Ave. Brazil 100 31.36 30.75 35.39 13.52 14.09 10.12 China 100 10.02 9.14 15.77 9.63 8.73 15.57 Mexico 100 36.12 34.84 44.49 7.84 5.81 21.24 Malaysia 84.26 23.01 14.85 66.85 6.5 5.79 11.19 Russia 100 7.76 7.24 11.22 9.95 9.39 13.34 India 73.81 48.58 34.5 113.11 13.72 10.43 33.5 World 78.32 32.45 28.43 45.43 6.8 6.52 8.84 EU 100 3.96 4.01 3.79 1.49 1.41 1.97 OECD 93.19 11.85 10.22 17.31 3.19 2.86 5.33 USA 99.98 3.45 3.26 4.69 3.4 3.19 4.66 Source: World Trade Organization (2014).

Table 1 shows that India has not committed more than 25% of its tariff liberalization under the WTO, which means it has not established a maximum tariff to those imports from the member countries of the organization. Only 2% of tariff lines are duty free (Srinivasan, p. 10). In addition, India stands out for its high averages of consolidated and applied tariffs. As can be seen in the following CHART, India has significantly reduced its applied tariffs, which amounted to 81.5% in 1990. However, consolidated tariffs did not follow the same trend, which means that at any time the country could considerably raise its applied tariffs. The difference between consolidated and applied tariffs for India is significantly higher than for the rest of the world. According to the Office of the United States Trade Representative (USTR), this disparity between consolidated and applied tariffs generates uncertainty, since India has considerable flexibility to raise tariffs at any time.

CHART 13 Consolidated and applied tariff averages: India and the world (%)

Source: Prepared by the author with data from the World Trade Organization (2014) and the World Bank (2014C).

Despite India’s efforts to liberalize its trade, the country still maintains high tariff peaks on products such as flowers (60%), natural rubber (70%), automobiles and motorcycles (60-75%), Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 21 raisins and coffee (100%), alcoholic beverages (150%) and textiles (some rates exceed 300%). India has also established quotas for products such as corn and dairy products. Access to such quotas is difficult, as it depends on the destination of such imports (Office of the United States Trade Representative, 2014).

High tariffs limit third-party access to the Indian market and the country’s competitiveness in world markets, as imported inputs for the production of exportable goods face high tariffs. That is why Indian producers find it more attractive to sell in their own country than to export (Srinivasan p. 11).

2. Doha Round negotiations: Areas of common interest

India has been a member of the multilateral trading system since the creation of the former General Agreement on Tariffs and Trade (GATT). India is also a signatory of the Marrakech Agreement establishing the World Trade Organization (WTO). India has been a key and decisive player in the evolution of the Doha Round negotiations and has traditionally maintained a defensive posture in the multilateral trading system. At the Punta del Este meeting, which launched the Uruguay Round in 1986, India fancied itself as leader of developing countries and formed, along with Brazil, a countries that were not convinced of the need for a new round of negotiations, let alone the inclusion in the negotiating agenda of new issues such as services, intellectual property and investment measures (Srinivasan).

Since the WTO Doha Round was launched in 2001, India has sought protection of its commercial interests, forming with other like-minded developing countries in the formulation of a coordinated common position. Given that India is a country where most of the population lives in rural areas, the agricultural issue is of particular interest. Agriculture in India is associated with poverty and subsistence, and that is why the Asian country considers that any liberalization to be adopted by the WTO Doha Round should ensure a certain level of protection of livelihoods for the agriculture dependant population. India, for example, has tried to use subsidies to store large quantities of grains that ensure without such subsidies being subject to the ceilings agreed by the WTO, which has been another reason for the deadlock in the Doha Round negotiations (Expansion 2014).5 In contrast, India maintains a very aggressive position on liberalization of trade in services because of its interest in the movement of people (Mode 4) under the experts and independent qualified personnel category, which is consistent with the development of its services sector.

In addition, India seeks changes in the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement to accommodate concerns relating to bio-piracy, and is supporting the EC demand for a higher level of protection to biological medial products (Kaushik, 2009).

In the WTO, India coincides with Latin American and Caribbean countries in various working groups within the framework of the Doha Round negotiations. Such groups include the following:

: India played a key role in the creation of this group of developing countries with a common position on agriculture negotiations to deal with the proposals made by the United States and the in this area. This group puts pressure on developed countries to make reforms in agriculture that facilitate trade for its products. In the Doha Round, India

5 India maintains a programme of agricultural subsidies by which it purchases the crops from those small producers with less than 1.2 acres of land – who are the majority – above the market price and resells them at prices adjusted to the purchasing power of its poorest citizens.

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has promoted an emergency safeguard for developing countries to take corrective action through the application of higher tariffs in the event of a sudden increase in imports or induced reduction in import prices. India shares membership in this group with Argentina, Bolivia, Brazil, Cuba, Chile, Ecuador, Guatemala, Mexico, Peru, Venezuela and Uruguay.  G33: of countries that exerts pressure on developing countries to be more flexible and not limit the opening of their markets to agricultural products.  Non-Agricultural Market Access (NAMA 11): Coalition of developing countries that aims to limit market access to industrial products. India’s position states that the incipient and vulnerable industries in developing countries need protection to grow. In addition, India has refused to participate in the sectoral negotiations for the full liberalization of manufacturing sectors. Latin American and Caribbean members of this group include Argentina, Brazil and the Bolivarian Republic of Venezuela.  Mandatory disclosure within the scope of TRIP: A group represented by Brazil and India that seeks to amend the TRIPS Agreement for patent applicants to disclose the country of origin of genetic resources and traditional knowledge used in inventions, and provide evidence that they have received a “prior informed consent” (a term used in the Convention on Biological Diversity) and demonstrate that the benefits are shared in a “fair and equitable” way. This position is shared by other countries such as Bolivia, Colombia, Cuba, Ecuador, Peru and the Dominican Republic (WTO ADPIC)  Sponsors of the document TN/C/W/52: Group of countries that supports a proposal for modalities in negotiations on geographical indications (the multilateral register for wines and spirits and the extension of the higher level of protection beyond wines and spirits) and the patent applicants’ disclosure or obligation to disclose the origin of genetic resources and knowledge used in inventions. The Latin American and Caribbean region is represented by Antigua and Barbuda, Barbados, Belize, Brazil, Colombia, Cuba, Dominica, Ecuador, Guyana, Haiti, Jamaica, Peru, Dominican Republic, St. Kitts and Nevis, St. Vincent and the Grenadines, St. Lucia, and Trinidad and Tobago.

2.1. Trade agreements to support trade in India

In its new Foreign Trade Policy 2009-2014, the Government of India (through the Ministry of Commerce and Industry) decided to design policies to counteract the contraction in exports. Such policies include the support of strategic sectors, such as agriculture, handicrafts, jewellery, furs, electronics, hardware for information technologies, toys, textiles and sporting goods, through tax incentives, institutional changes, improvement of infrastructure for trade and market diversification. As regards this last point, as we can see in Table 2, the country has made efforts in recent years to ensure access for its products to new markets, mainly in Asia.

As a matter of fact, since 1997 the Indian Government established the programme Focus LAC to deepen economic relations with Latin America and the Caribbean, through the coordination of efforts between the public and private sectors to promote exports, in particular to its main regional partners in sectors such as textiles, handicrafts, chemicals, software and drugs. Sources of imports of products required by India are as follows: cereals, food, engines, crude oil and steel products from Argentina; auto parts, vehicles, coffee, soybeans and iron ore from Brazil; copper and sea products from Chile; crude oil, oil, silver, auto parts, components for personal computers from Mexico; or oil, bauxite, aluminium, petrochemicals and steel from Venezuela (Bittan).

India is negotiating agreements with the countries of the European Union, the European Free Trade Association (EFTA) and the Southern African Customs Union (SACU), in order to remove the barriers that limit its trade with its major partners in the world. If such negotiations are successful, Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 23 the Latin American and Caribbean countries will be at a disadvantage compared with this group of countries. As for agreements with Latin America and the Caribbean, India has entered into only partial scope agreements with Chile and MERCOSUR, which are limited to a select group of products and do not include services. This stresses the need for Latin America and the Caribbean to develop a strategy for approaching this market and ensuring better access to the markets of goods and services of its Asian counterpart.

Despite India’s substantial barriers to trade, the negotiation of this network of agreements is indicative of the opportunities that could emerge from agreements and institutional frameworks which could significantly boost trade flows. According to a study by C. Zaki (2014), India could reduce administrative costs and make a profit of US$ 35 billion (2005 prices) in 2020 by complying with the WTO provisions on trade facilitation.

TABLE 2 India’s trade agreements Agreement In force Countries Description Brunei, Myanmar, Cambodia, , Laos, Malaysia, India – ASEAN 2010 Agreement on free trade in goods , Vietnam, Thailand Asia-Pacific Free Trade Bangladesh, China, India, 1976 Partial scope agreement on goods Agreement South Korea, Laos, Sri Lanka India – Chile 2007 Chile Partial scope agreement on goods Global System of Trade Partial scope agreement on goods 1989 Developing countries* Preferences India – Afghanistan 2003 Afghanistan Partial scope agreement on goods India – Bhutan 2006 Bhutan Free Trade Agreement on goods Partial scope agreement on goods and India – Japan 2011 Japan services Partial scope agreement on goods and India – Malaysia 2011 Malaysia services India – Nepal 2009 Nepal Partial scope agreement on goods Partial scope agreement on goods and India – Singapore 2005 Singapore services India – Sri Lanka 2001 Sri Lanka Partial scope agreement on goods Partial scope agreement on goods and India – South Korea 2010 South Korea services Argentina, Brazil, Paraguay India – MERCOSUR 2009 Partial scope agreement on goods and Uruguay Bangladesh, Bhutan, South Asian Free Trade 2006 Maldives, Nepal, Partial scope agreement on goods Agreement and Sri Lanka * , Argentina, Bangladesh, Benin, Bolivia, Brazil, Cameroon, Chile, Colombia, Cuba, Ecuador, , , Guinea, Guyana, Indonesia, , , South Korea, Libya, Macedonia, Malaysia, Mexico, , Mozambique, Myanmar, Nicaragua, , Pakistan, Peru, Philippines, Romania, Singapore, Sri Lanka, Sudan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Venezuela, Bolivia, Vietnam, Zimbabwe. Source: World Trade Organization (2014).

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2.2. Trade flows between India and Latin America and the Caribbean

Despite existing barriers to flows, trade and investment are the main variables that explain the renewed link between India and Latin America and the Caribbean. Trade between the two sides reflects the dynamics of South-South trade flows, which have experienced considerable growth in this new millennium. Although we must start with very low volumes and values, which allows for high growth rates, it is also true that Latin America and the Caribbean and India begin to see each other as partners to increase their opportunities for trade in goods and services and investment in productive activities.

TABLE 3 Latin America and the Caribbean: Total trade and with India (millions of US$) Ratio Ratio LAC LAC LAC Ratio LAC Exports Exports LAC Exp. LAC LAC imports total total total trade from from to India Imports imports. from India trade trade with India LAC LAC to / World from from / World with with / World Years to World India (%) World India (%) World India (%) 2001 339758.7 1575.8 0.46% 364420.9 1502.4 0.41% 704179.6 3078.2 0.44% 2002 343752.6 2012.0 0.59% 337487.1 1585.2 0.47% 681239.8 3597.1 0.53% 2003 378687.1 1883.8 0.50% 351796.4 1704.7 0.48% 730483.5 3588.5 0.49% 2004 470425.6 2378.8 0.51% 425299.1 2336.7 0.55% 895724.8 4715.5 0.53% 1084775. 2005 570908.9 3262.2 0.57% 513866.4 3386.4 0.66% 3 6648.6 0.61% 1296428. 2006 682625.4 4541.8 0.67% 613803.6 4216.9 0.69% 9 8758.7 0.68% 1390490. 2007 704502.5 6287.6 0.89% 685988.0 5515.4 0.80% 5 11803.0 0.85% 1773787. 2008 885218.4 5522.7 0.62% 888568.9 8141.2 0.92% 2 13663.9 0.77% 1377643. 2009 698155.3 7256.6 1.04% 679488.0 6088.7 0.90% 3 13345.4 0.97% 1756997. 2010 882204.1 8455.8 0.96% 874793.4 9651.4 1.10% 5 18107.2 1.03% 1102444. 1062573. 2165017. 2011 4 9457.8 0.86% 0 12893.9 1.21% 4 22351.8 1.03% 1018739. 1146171. 2164911. 2012 7 14782.3 1.45% 5 13569.7 1.18% 2 28352.0 1.31% 1018812. 1168977. 2187790. 2013 8 14126.7 1.39% 2 15932.8 1.36% 1 30059.5 1.37% AGR 24.99% 74.71% n.a. 26.73% 88.37% n.a. 25.89% 81.38% n.a. Source: Prepared by the author with data from the International Trade Centre, Trade Map (2014B). n.a. = No applicable Note: AGR is the Average Growth Rate, from 2001 to 2013.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 25

Exports from Latin America and the Caribbean6 to India have increased at an annual rate close to 75%, while the growth in imports is greater with an annual rate of 88%. The growth in both flows is greater than that in Latin American and Caribbean trade with the world, which has increased India‘s share as a trading partner of Latin America and the Caribbean. The region as a whole sends and receives from India about 1.4% of its exports and imports.

The Latin American and Caribbean region as a whole has reported a trade deficit with India. However, most of its major trading partners maintain a trade surplus in their balance. CHART 14 shows that exports exceed imports in the Bolivarian Republic of Venezuela, Mexico, Colombia, Chile, Argentina, Ecuador and Costa Rica. Out of the ten major trading partners in Latin America and the Caribbean, Brazil, Peru and the Bahamas reported a trade deficit with India in 2013.

CHART 14 Trade flows of India’s major trading partners in Latin America and the Caribbean, 2013 (millions of US dollars)

Source: Prepared by the author with data from the International Trade Centre, Trade Map (2014B).

From 2009 to 2013, India’s major partners in Latin America and the Caribbean reported annual growth rates in their trade with that country that exceeded double digits. Bahamas stood out with an average annual growth in exports of 167%, followed by rates of more than 70% for Colombia and Peru. As for imports, Brazil and Mexico were outstanding with average annual growth rates of 35% and 42%, respectively.

Despite the significant growth in trade between several Latin American and Caribbean countries and India, only the Bolivarian Republic of Venezuela is among the first ten trading partners of the Asian country by the value of exports. As for imports, Brazil is the 12th destination of products from India. Out of these two cases, Latin American countries are distant trading partners of India with respect to countries in other regions.

The Bolivarian Republic of Venezuela significantly expanded its exports to India since 2006, when it began to export oil to the Asian country. Before that year, Venezuelan exports to this nation were

6 The LAC group considered in this study for trade figures includes Anguilla, Antigua and Barbuda, Netherlands Antilles, Argentina, Aruba, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominica, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Malvinas Islands, Cayman Islands, Turks and Caicos Islands, British Virgin Islands, Jamaica, Monserrat, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, Suriname, Trinidad and Tobago, Uruguay and Venezuela.

Permanent Secretariat Extra-Regional Relations 26 practically zero. Today, the subheading “petroleum oils” represents 99% of Venezuelan exports and 98% of the total trade flow. In addition, thanks to oil exports, India is among the main destinations of exports from Colombia.

Trade between India and Latin America and the Caribbean has grown despite the existing trade barriers, not only in India, as mentioned above, but also in Latin America and the Caribbean. From 1992 to 2004, the weighted average of tariffs in Latin America and the Caribbean (taking into account tariffs applied to countries with most favoured nation status and ad valorem equivalents of non-tariff barriers) was 27% for imports from the world and 10% higher for imports from India. This tariff was higher in South American countries (Facchini, et al., 2010).

TABLE 4 Latin America and the Caribbean: India’s main trading partners Growth of Growth of % share and Trade balance % share and imports exports Country position in (thousand US$) position in Indian 2009-2013 2009-2013 Indian imports exports (annual %) (annual %) Venezuela 14715.689 3.2 (9) 0.1 (92) 8 67 Brazil -2279.995 0.8 (27) 1.8 (12) 35 11 Mexico 2143.924 0.9 (24) 0.6 (37) 42 52 Colombia 3249.991 0.9 (25) 0.3 (45) 31 75 Chile 2537.607 0.7 (30) 0.2 (59) 26 36 Argentina 477.355 0.2 (42) 0.2 (62) 26 15 Peru -19.129 0.1 (54) 0.2 (58) 33 70 Bahamas -677.414 0 (99) 0.2 (55) 11 167 Ecuador 56.213 0.1 (72) 0.1 (79) 28 64 Costa Rica 135.575 0 (82) 0 (125) 29 28 Source: Prepared by the author with data from the International Trade Centre, Trade Map (2014B).

According to Facchini, et al. (2010), sectors with a higher share of imports from China and India face greater protection in Latin America and the Caribbean. The authors claim that one possible explanation for such protectionism could be the degree of substitutability between imported products and products produced in Latin America, which they confirm in the case of China, but not of India. Through an analysis of elasticities in substitution utility curves, Facchini, Olarreaga, et al. (2010), conclude that there is statistically significant evidence proving a high degree of substitutability of products from China. However, the degree of substitutability between products from India and Latin America is not statistically different from zero. This study provides evidence that trade between Latin America and the Caribbean and India could be complementary and provide attractive opportunities to apply policies that favour their flow.

3. Imports

From 2001 to 2013, Latin American and Caribbean imports from India increased by more than tenfold. With the exception of 2009 – year of the international crisis – such imports have grown continuously during the aforementioned period of twelve years. As of 2009, recovery has been significant, as exports not only recovered from the levels reported in 2007-2008, but doubled their value. Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 27

Annex V of this document shows Latin American and Caribbean imports from India, classified by value of imports in the harmonized system in 2013, in descending order. The Latin American and Caribbean region imports many products from India, mainly mineral fuels, motor vehicles, organic chemicals, machinery and pharmaceutical products. These first five chapters cover 59.3% of Latin American and Caribbean imports from the Asian country. These categories correspond to India’s most exported products to the world and those in which the country has a comparative advantage.

The column of possible coverage of Latin American and Caribbean imports with exports from India shows how much of the region’s demand for imports of certain products could be covered with what India exports to the world. There are chapters, such as pearls and precious stones; gums, resins and other vegetable saps and extracts; silk; textile fibres; carpets; plaiting materials; coffee and tea, and cotton, in which India could meet at least twice the joint demand of Latin American and Caribbean countries. India meets 5-10% of its demand for such products, which shows that there is still a market left that India could cover, as for most of the aforementioned chapters India allocates less than 3% of its exportable offer to Latin America and the Caribbean.

Other examples that stand out because of their market opportunity are cereals, which represent nearly 70% of the Latin American and Caribbean demand, but India allocates only 0.05% of its exportable offer and covers 0.01% of demand; lead and lead products, which cover 60% demand of the region’s demand, but India exports 0.09% of its offer and meets 0.01% of such demand; meat and edible meat offal, of which the Asian country has the potential to cover 55% of Latin American and Caribbean imports, but its exports and coverage are zero, and aeronautical navigation products, of which India could cover 48% of the Latin American and Caribbean imports, but its exports and coverage are nil.

In a similar situation are works of art; zinc and articles thereof; edible nuts; copper and articles thereof; skins; fish and crustaceans; vegetables; oil seeds and oleaginous fruits; salt, sulphur, gypsum and lime; nickel and articles thereof; and feathers and articles made of feathers or down.

4. Exports

Latin American and Caribbean exports to India increased by almost nine times. With the exception of 2003 and 2008, the region’s exports to India have grown continuously. As in the case of imports, the flow of exports has almost doubled since the international financial crisis.

Annex VI of this document shows exports from Latin America and the Caribbean to India, sorted in descending order by value in 2013 and classified into chapters of the Harmonized System. Exports to India are even more concentrated than imports. Most of exports fall into five chapters, namely: Mineral fuels; ores and slags; fats and animal fats; sugar and confectionery, and pearls and precious stones, which account for 86% of total exports from Latin America and the Caribbean to India. Unlike the case of imports, where most of the products imported by Latin America and the Caribbean are precisely the products most exported by India, in the case of exports, there are products in which Latin American and Caribbean countries have a comparative advantage, since they are not included in the top products exported to India. That is the case of motor vehicles, seeds and oleaginous fruits.

In 2013, the total value of exports from Latin America and the Caribbean was 2.2 times higher than the value of the region’s total imports from India. There are at least 65 chapters of the Harmonized System in which Latin America and the Caribbean could cover more than double current India’s

Permanent Secretariat Extra-Regional Relations 28 demand. However, on many occasion this has not been possible because India’s imports are low for certain products.

The chapters in which India imports more than US$ 5 billion and Latin America and the Caribbean could cover more than 100% of India’s demand are the following: machinery and nuclear reactors; appliances and electrical equipment; cast iron and steel; plastics and articles thereof; fats and oils of animal or vegetable origin; ores and slags; maritime navigation products; optic, photography and cinematography instruments, and chemical products. With the exceptions of fats and oils of animal or vegetable origin and ores and slags, India covers less than 2% of the demand for the aforementioned products, which evidences its marketing potential.

Examples of other products standing out in terms of market opportunities are the following: 1) Fertilizers. Latin America and the Caribbean could cover 47% of India’s demand, but sells it less than 0.03% of its exportable offer and ends up covering 0.01% of its total demand. 2) Paper, cardboard and articles thereof. Latin America and the Caribbean could cover more than 100% of India’s demand, but it covers only 0.07%, since it sells to India only 0.03% of its exports of these products. 3) Furniture. Similarly, Latin America and the Caribbean could cover the whole of India’s demand, but it covers only 0.04%, selling barely 0.36% of its exportable offer.

Other product headings with market opportunities are: other chemicals; legumes and vegetables; rubber and articles thereof; aluminium and articles thereof; pearls and precious stones; organic chemicals; edible nuts; motor vehicles and parts thereof; aerial or spatial navigation articles; copper and articles thereof; wood, and charcoal.

5. Investments

The opening-up of the Indian and the Latin American and Caribbean economies since the 1990s has allowed for attracting FDI flows in both directions. In India, until 1991 the State enterprises accounted for up to 41% of the gross fixed investment, compared with 18% for Latin America and the Caribbean on average (Mesquita 2012, p. 16). The Indian government has reduced its share in enterprises where it previously was a majority partner in order to allow for a greater presence of private capital.

Investment flows between India and Latin America and the Caribbean have significantly increased over the past decade in both directions, considering that they started on a very modest basis. An instrument to promote these flows has been the negotiation of bilateral Agreements on Reciprocal Promotion and Protection of Investments (ARPPIs), signed by India with 84 countries around the world. With Latin America and the Caribbean, India has negotiated four ARPPIs: with Trinidad and Tobago (2007), Mexico (2008), Argentina (2002) and Colombia (2012). India also signed an ARPPI with Uruguay in 2008; however, it has not entered into force (India, Business Portal of India, 2013). Having a larger number of agreements that provide greater certainty and predictability to capital flows, investments between India and Latin America and the Caribbean could gain greater dynamism, particularly flows from Latin America and the Caribbean to India, which are still at low levels.

Little by little, India emulates the trend of other Asian countries which are in transition from being mere recipients of FDI to starting investing abroad. In the 1990s, India was not included among the 12 major emerging economies by their investments abroad. But that situation has changed since the year 2000. On average, between 2006 and 2012, India invested annually more than seven times the amounts it had invested between 2000 and 2005. Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 29

CHART 15 Main developing economies by investments abroad Average annual disbursements, in US$ million

2000-2005

2006-2012

Source: ECLAC, Foreign Direct Investment in Latin America and the Caribbean, 2013 (2014).

In 2012, investment flows from India to other countries (US$ 8.582 billion) were relatively lower than the average corresponding to the previous five years. Even so, the stock of FDI from India abroad reached US$ 118.166 billion in the same year, representing an annual average increase of 13.5% since 2009. Until 2012, the International Trade Centre (2014) recorded 669 Indian parent companies with more than 1,288 subsidiaries in different countries.

Latin America and the Caribbean has gained an increasingly stronger position in terms of investments from India in the world, as 478 out of the 669 Indian parent companies are operating in the region, with 790 out of the 1,288 Indian subsidiaries located abroad. In terms of employment, the 115 Indian companies established in Latin America and the Caribbean for which data was available (15% out of the total) employ more than 30,000 workers.

Indian companies have started to stand out among those making the largest acquisitions of companies established in Latin America and the Caribbean. In 2013, the US$ 529 million purchase made by Oil and Natural Gas Corporation of 12% of the assets of Block BC, an oil company based

Permanent Secretariat Extra-Regional Relations 30 in Brazil, was the 14th most important acquisition in terms of value in Latin America and the Caribbean (ECLAC 2014).

It is precisely Brazil where India has established the largest number of companies. As can be seen in Annex VII, Brazil is the LAC country which with more Indian companies operating in almost all sectors. India has also made significant investments in countries such as Mexico and Chile; but it also has presence in Argentina, Barbados, Bahamas, Bermuda, Bolivia, Colombia, Costa Rica, Ecuador, Honduras, the Cayman Islands, Panama, Paraguay, Peru, Dominican Republic, Trinidad and Tobago, Uruguay, and Venezuela.

Sectors standing out due to the number of Indian companies and number of countries in which they have presence in Latin America and the Caribbean are the following: manufacture of electronic equipment; wholesale and retail trade; transport, storage and communications; and real estate and rental activities.

In the sector of mining and oil, the Indian company Oil and Natural Gas Corporation Ltd has the greatest participation in Latin America and the Caribbean. In addition to Brazil, this Indian company is exploring Cuban waters in the Gulf of Mexico in search for oil and also has projects with the oil industries of Colombia and Venezuela.

With the energy reform recently approved by Mexico, Oil and Natural Gas Corporation Ltd is quite likely to seek further investments. Meanwhile, Indian companies Jindal Steel and Power Ltd. and Reliance Industries Ltd. have won tenders for oil and gas exploration in Peru. Reliance Industries Ltd. has also struck agreements for exploration and production with the National Hydrocarbons Agency of Colombia (ANH). Ispat Industries Ltd. Its conducting operations for production of steel in Mexico, extraction of iron in Brazil and extraction of coal in Colombia. At the same time, JSW Steel is licensed to explore and extract iron in Bolivia and magnetite in the north of Chile and recently installed a polysilicon plant in Mexico. Moreover, steel company Arcelor Mittal acquired its counterpart Acindar in Argentina and maintains major operations in Mexico. In turn, Abytia Birla invested in a lampblack plant, which is also located in Mexico.

Large Indian consultancy companies such as Tata Consultancy Services have expanded in Latin America and the Caribbean. At present, Tata Consultancy has operations in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Uruguay. Other important Indian companies operating in Latin America and the Caribbean are: 247 Costumer, a company specialized in service to customers, in Guatemala; software companies Wipro Technologies Ltd. and Infosys Technologies, operating in Mexico and Brazil, respectively; Satyam Computer Services Ltd. in Brazil; and Evalueserve, a consulting firm with operations in Chile (SELA, 2009) (See Annex IV for a list of Indian companies operating abroad).

As a recipient of FDI, India has also gained ground as one of the top destinations among emerging countries. In 2012, India received US$ 8.286 billion – reaching an internal stock of US$ 226.345 billion – mainly from United States, United Kingdom and France. Since 2009, the country has posted an average annual growth of 9.7% in received direct investments. According to data from the Center for International Trade (2014), there are more than 1,900 foreign parent companies operating in India with more than 4,600 subsidiaries.

Some of the activities attracting increased levels of FDI flows in India are in the service sector, which could be an indicator of opportunities in sectors such as hotels and restaurants, financial intermediation, provision of services and construction, among others. Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 31

TABLE 5 Latin America and the Caribbean: Sectors that recorded FDI inflows in India, 2012 Number of Industry Inflows 2012 parent Subsidiaries companies Total (Services and goods) 18,286.0 1,933 4,633 Undetermined in secondary sector 6,528.0 Hotels and restaurants 3,129.0 31 42 Financial intermediation 2,760.0 96 312 Electricity, gas, vapour and hot water supply 1,653.0 9 11 Construction 1,319.0 75 87 Real estate, business and rental activities 1,087.0 628 1.077 Undetermined in tertiary sector 692.0 Wholesale and retail trade 551.0 510 747 Transport, storage and communications 305.0 259 514 Teaching 150.0 12 13 Mining and quarrying 69.0 6 8 Source: Prepared by the author with data from the International Trade Centre, Investment Map (2014).

FDI flows from Latin America and the Caribbean to India contrast with the dynamism of investments coming from India to Latin America and the Caribbean, despite the fact that the countries in the region are also going through the transition from merely receiving investments to becoming investors. Even though significant investments made by Caribbean countries such as the Netherlands Antilles, Bermudas, Bahamas, Cayman Islands and the British Virgin Islands have been registered, these countries act mainly as financial intermediaries, which makes it difficult to track down the true country of origin of those investments.

Besides those Caribbean countries, in LAC only Brazil and Mexico have a significant number of companies operating in India, mainly in sectors such as real estate, manufacture of non-metallic mineral products, manufacture of machinery and equipment, manufacture of electronic equipment, manufacture of vehicles, and wholesale and retail trading. These sectors also contrast with the general trend of FDI inflows to India, which are mainly targeted at the services sector. Other LAC countries with companies in India are: Argentina (Chemo, pharmaceutical sector), Chile (Sigdo Koppers, construction, and Sociedad Química y Minera, mining), and Peru (Ajegroup, beverages) (ECLAC 2014).

Last but not least, the Chambers of Commerce and the partnerships between the private sectors of both sides are a key instrument for trade and investment relations. They have become a valuable mechanism to forge closer ties between the countries of Latin America and the Caribbean and India. Chambers and partnerships have contributed to increase knowledge of business opportunities and networking through regional promotion, the conduction of annual fairs and trade missions, and the establishment of regional offices. At the regional level, the India-CELAC Summit led to the creation of an India-CELAC Council Business and a Forum of Directors and Managers of Bi-Regional Companies. These instruments could also contribute to increase the representation of other countries, mainly Central American and Caribbean, which would help diversify business opportunities.

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TABLE 6 Binational trade chambers between India and Latin America and the Caribbean

Country Chamber Web site Argentina Argentine-Indian Chamber of Industry http://www.cciai.com.ar/ (under and Trade construction) Brazil Brazil-India Chamber of Trade http://www.indiabrazilchamber.org/ Chile Chilean-Indian Chamber of Trade http://camindia.cl/ Colombia Colombia-India Chamber of Trade and http://www.camaracolombiaindia.org/ Industry

Ecuador Ecuadorian-Indian Chamber of Trade http://www.camara-ecuatoriana-india.ec/ (under construction) Guatemala Guatemala-India Chamber of Trade and http://www.camaraguatemalaindia.com/ Industry Mexico India-Mexico Chamber of Business http://www.imbc.org.mx/quienes_somos.htm l Peru Indian Chamber of Trade in Peru http://incham.pe/drupal/quienes-somos Uruguay Uruguay-India Chamber of Trade n.a. Source: ALADI, Directory of Business Entities (2014).

The current status of trade and investment relations between India and Latin America and the Caribbean still offers broad opportunities for significant expansion. In terms of trade, barriers to trade and the lack of preferential trade agreements have not allowed for developing greater exchanges. Direct investments have grown mainly from India to Latin America and the Caribbean and remain concentrated in the largest countries of the region, such as Brazil and Mexico. Investments made by Latin American and Caribbean countries in India are still at a low level, even though India is consolidating itself as an emerging economy.

The next section contains proposals to strengthen cooperation and the institutional framework between India and Latin America and the Caribbean, which could serve to promote cultural, scientific, political and educational exchanges, and to facilitate business opportunities.

III. INDIA’S INTERNATIONAL COOPERATION

India is a young country in comparison with most of Latin American and Caribbean countries, many of which have been independent for more than 200 years. Despite this fact, India is an active participant in many of the main international organizations. Many LAC countries and India coincide, either as observers or as full members, in various multilateral bodies. Below are some areas in which India and LAC countries share interests in regional and multilateral agendas. Special emphasis is made on issues such as education, innovation and SMEs, environment and energy, and tourism and transport, which have been identified as sectors that have potential to be developed through programmes and cooperation actions.

1. Coincidences in regional and multilateral organizations

There are international forums such as the G-20, the BRICS Group, the India-CELAC consultation mechanism, and the IBSA Dialogue Forum (India, Brazil, ), where India shares issues of global interest with Latin America and the Caribbean. Following are some recent, and substantial, cases of rapprochement between the two parties.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 33

1.1 Community of Latin American and Caribbean States (CELAC) – India

Within the regional context, the Community of Latin American and Caribbean States (CELAC) has served as a forum for rapprochement with India. In August 2012, the first consultations between India and Latin America and the Caribbean were held in New Delhi, through the Troika of Ministers of Foreign Affairs of Venezuela, Chile and Cuba on behalf of CELAC. The main objective of the consultations was to coordinate responses to various regional and global issues, such as the reform of the United Nations, the international financial crisis, and the threat of terrorism. The parties listed achievements in the areas of energy, mining, agriculture, science and technology, culture and education, and stressed the importance of increasing cooperation in those areas. At the opening of such consultations, the Secretary (West) Shri M. Ganapathi of the Ministry of Foreign Affairs of India, stated:

“Our approach to this region has been admittedly slow. There is the ready excuse giving reasons of distance, poor connectivity and language constraints. However, these are unacceptable and we need to do more. We are determined to overcome any mindset which may have inhibited an enhanced engagement with the region. While there will be challenges, there are opportunities as well. It is our aim to overcome these challenges and convert them into opportunities. A concerted and cogent approach will be formulated to direct our attention and energy to this very important region with which we could naturally forge a productive partnership.” (Ganapathi, 2012).

One of the main agreements was to increase official visits at all levels in order to achieve a strategic partnership between India and CELAC. In addition, an agreement was reached to create an India-CELAC Business Council and an India-CELAC CEOs Forum, which are expected to submit recommendations towards further enhancement of links between India and Latin America and the Caribbean (Voice of India, 2014). Since their meeting in August 2012, CELAC and India have not gathered again and there is little information on the follow-up to the agreements reached in New Delhi. Nevertheless, this is the only cooperation mechanism to promote integration between India and Latin America and the Caribbean.

1.2 Pacific Alliance

At present, India is an Observer to the Pacific Alliance, which was established by Colombia, Chile, Mexico and Peru in April 2011. Within the framework of the VIII Summit of Leaders of the Alliance, held in Cartagena de , India was admitted as an Observer, which makes it one of the 29 countries with such status in the Alliance.

1.3 IBSA Dialogue Forum

Although the trilateral IBSA Dialogue Forum (India, Brazil and South Africa) links only one LAC country (Brazil) with India, it deserves to be mentioned in view of its interest in promoting an agenda for South-South Cooperation and its lessons for the Latin America and the Caribbean region as a whole. It was created in 2003 through the Declaration of Brasilia as a trilateral coordination forum to promote cooperation projects. IBSA responded to the need for the three countries to reform international institutions to obtain a greater representation of emerging economies. IBSA has no official headquarters, nor a Permanent Secretariat, but it annually convenes the Foreign Ministers of the three countries to meet in order to chair a Joint Commission. Within the framework of IBSA, the Forum’s Fund was created in 2004. It is administered by the UNDP, and is intended to support countries with lower levels of development or facing reconstruction processes. Each one of the member countries contributes one million dollars to the

Permanent Secretariat Extra-Regional Relations 34

Fund per year. Thus far, the fund has financed projects related to safety, health, education, rural electrification and capacity building in Guinea Bissau, Haiti, Cape Verde, Cambodia, Sierra Leone, Laos, Viet Nam, Burundi and Palestine.

IBSA involves the participation of different official levels from the three countries. Since 2006, there have been five Summits of Heads of State, with the last one being held in South Africa in October 2011. Originally, the sixth IBSA Summit was to take place in June 2013 in New Delhi; however, it was postponed due to “scheduling problems”. Up to mid-2014, a possible date for the summit has not been set. Within the Forum, there are various working groups on issues such as public administration, agriculture, human settlements, science and technology, culture, defence, trade and investment, social development, education, energy, health, environment and climate change, transport and tourism. The agreements signed between Brazil and India within the framework of IBSA are listed in Annex III of this document. They cover a range of topics, such as education, environment, health, energy, public administration, tax coordination, social development, human settlements, agriculture, trade, investment and culture.

These biregional mechanisms have been created specifically for strengthening ties in areas where both parties have found important mutual interests.

1.4 Movement of Non-Aligned Countries

This Group was created in 1961 to discuss major global problems, making emphasis on the equality of relations among countries and the neutrality of developing countries vis-à-vis the events of the . The group grew out of the initiative of the Heads of State of India, Myanmar, Indonesia, Egypt, Ghana and Yugoslavia. At present, the Group has more than 120 members and 17 observers. All the countries of Latin America and the Caribbean are members with the exception of Argentina, Brazil, Costa Rica, El Salvador, Mexico, Paraguay and Uruguay, which have the status of observers.

At the end of the Cold War, the Group had to redefine itself, and now its mission includes issues such as , the reform of the United Nations, human rights and South-South Cooperation as a strategy for economic and social development. Its latest Summit was held in Tehran in August 2012.

The equality of relations among countries, the need for fairer trade and the end of colonialism have been issues on the international agenda of India. This has led the Asian country to have a greater affinity for developing relations with other developing countries not only through the Non- Aligned Movement, but also through the , G-24, IBSA and the BRICS Group.

1.5 Group of 77 (G-77)

The G-77 was established on 15 June 1964 by 77 developing countries which signed the Joint Declaration of the Seventy-Seven Countries. The Group of 77 currently has 132 members and it is the largest inter-governmental organization of developing countries within in the United Nations. One of its main objectives is to provide the appropriate means for the countries of the South to coordinate and promote their interests within the negotiations of the United Nations system.

India was the first country to chair the group in 1970. During 2014, the Presidency will be in charge of Bolivia. At present, all the countries of Latin America and the Caribbean are members of the Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 35 group, with the exception of Mexico (original member of the G-77 that left the group when it adhered to the OECD).

1.6 (G-24)

The G-24 is a chapter of the G-77 and was created in 1971. It seeks to coordinate the actions of developing countries on monetary and financial issues for achieving their full participation and representation in the reform to the international monetary system. The Group meets twice a year, just before the meetings of the International Monetary and Financial Committee of the IMF and the Development Committee of the World Bank, to outline joint positions and responses.

Its members are divided into three geographical groups (Africa, Latin America and the Caribbean, and Asia) where India is one of its founders and permanent members. In addition to the 24 permanent members, any members of the Group of 77 can participate in the discussions. Current Latin American and Caribbean members include Argentina, Brazil, Colombia, Guatemala, Mexico, Peru, Trinidad and Tobago, and Venezuela. At present, Luis Videgaray, Secretary of Finance of Mexico, chairs the group.

1.7

This group of countries grew out of the Movement of Non-Aligned Countries as a forum for discussion on cooperation in investment, as well as trade and technology issues. Apart from India, other participants from Latin America and the Caribbean include Argentina, Brazil, Chile, Jamaica, Mexico and Venezuela.

Some of the projects carried out by the group in India, Latin America and the Caribbean include a computer training centre and the development of natural applications based on solar energy in India, as well as a natural sciences and environmental centre and a laboratory of Toxicology for the Institute of Natural Products in Jamaica.

1.8 The Commonwealth

This group comprising 53 countries promotes cooperation in various fields among those countries that were British colonies and which continue to maintain links with the United Kingdom. India is the largest Member of the Commonwealth by population and is the fourth largest contributor to its budget. In addition to India, in Latin America and the Caribbean the following countries form part of the Commonwealth: Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, and Trinidad and Tobago.

The Summit of the Heads of Government of the Commonwealth meets every two years. Cooperation is carried out in different activities, including trade negotiations, democracy, human rights, governance, sustainable development, sports, assistance to small enterprises, empowerment of women, and support to young people.

The last Summit of Heads of Government, held in Colombo, Sri Lanka, in 2013, reviewed, among others issues, the creation of a Fund for the Development of Communication Media in order to renew it. Participants also agreed that Finance Ministers should develop proposals to strengthen links between the Commonwealth and the G-20; some recommendations were made to the Group of Experts on Financing for Climate Change in order to facilitate access to credit for small

Permanent Secretariat Extra-Regional Relations 36 developing island States. In addition, a Council on Youth was established and its members were elected.

For 2014, meetings and summits are scheduled, such as the Meeting of Experts in Youth Indicators in June, the Meeting of Ministers of Sports in July, the presentation of awards to women entrepreneurs in August, the Commonwealth Games in August, and the Meeting of Finance Ministers in October.

1.9 Group of 20 (G-20)

After the international crisis of 2008, the G-20 replaced the G-7 and the G-8 as the top forum for discussion on international economy and finances. Since its creation in 1999, the Group of 20 has set global economic stability and the promotion of sustainable growth as its main objectives.

The G-20 members account for around 90% of the world's GDP, 80% of global trade and two- thirds of the world population. Thus, the group represents those developed economies and emerging countries with the greatest relevance and relative weight in the world. India, Argentina, Mexico and Brazil form part of the emerging economies that make up the group.

After the collapse of Wall Street in September 2008, the G-20 met at the level of leaders in the Summit of Washington, DC, United States, in November of that year to propose joint solutions to the crisis. Unlike the G-8, the composition of the group evidences the growing influence of emerging countries on the global stage.

In the G-20, India along with Argentina, Brazil and Mexico are recognized as emerging economies with a specific weight on the global economy and with the possibility of having an impact on international governance. In view of the consolidation of the G-20 as the main international forum for economic cooperation, the Indian government created the G-20 Indian Secretariat as an independent entity to provide technical and secretariat support to the APEX Council for G-20 issues, under the direction of the Minister of Finance. The Secretariat provides guidance for outlining policy proposals, assists in the formulation of the country's responses to issues referred to in the G-20 and provides advice to the Prime Minister on the basis of specific requirements. (India, G-20 India Secretariat).

India, along with Argentina, Brazil and Mexico, share not only priorities as regards growth and development of emerging countries, they also recognize the need for the international architecture to reflect the vision and contributions of emerging economies. During the St. Petersburg Summit, the stressed that “the process of coordination of G-20 policies has to pay more attention to monetary policy”, and pointed to the urgency of “reviving growth and employment” (India 2013D). These subjects reflect full coincidence between the agendas of both parties.

1.10 BRICS

It is an acronym for Brazil, Russia, India, China and South Africa and also the name of the group that brings those countries together to promote cooperation among them. BRIC is a term that first appeared in 2001 in a report by the Goldman Sachs Bank. That report predicted that Brazil, Russia, India and China could become the four dominant powerhouses by the year 2050, due to their size, population and resources, and above all thanks to their dynamic economic Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 37 growth. South Africa was invited to join the group in 2010 and officially joined it at the 2011 Summit.

The Forum focuses primarily on discussing the global economic situation, the need to reform the international financial institutions, the representation of developing countries in the global system, and the way in which its members could cooperate more intensely in the future.

The BRICS Summit is carried out annually. After the first Summit in Yekaterinburg, Russia, in 2009, the venues have been Brasilia, Brazil, in 2010; Sanya, China, in 2011; New Delhi, India, in 2012; Durban, South Africa, in 2013; and Fortaleza and Brasilia, Brazil, in 2014.

One of the main objectives of the BRICS is to reform the institutions of political and economic governance at the global level. Its agenda includes the international economic situation, the need to reform the international financial institutions, the representation of developing countries in the global system, its relationship with the G-20, and the way in which its members could cooperate more closely as regards issues such as environment, energy, development, agriculture, combating poverty, infrastructure and trade (BRICS, 2013B).

In the VI BRICS Summit, held in Fortaleza and Brasilia, Brazil, from 14 to 16 July 2014, the member countries drew up a Plan of Action contained in the Declaration of Fortaleza. In addition to voicing their stance on various international economy and security issues, they agreed to create a New Development Bank with the purpose of providing resources for infrastructure projects to facilitate sustainable development. The headquarters of the Bank will be in Shanghai, China. The Bank’s authorized capital is US$ 100 billion and will start operations with an initial capital of US$ 50 billion provided by the member countries in equal parts. The post of President of the Bank shall rotate every year. India will be the first country to hold this position.

The Declaration of Fortaleza also announces the signing of the Treaty for the Establishment of the BRICS Agreement on Reserves for Contingencies, with an initial value of US$ 100 billion. Its objective will be to deal with pressures stemming from lack of liquidity in the short term, facilitate cooperation among the BRICS countries and strengthen global financial security. Similarly, the BRICS instructed their institutions in charge of statistics, health and education to create methodologies to develop a joint publication on social indicators, and signed a Memorandum of Understanding for cooperation among Guarantees and Export Credit Agencies.

In the same Declaration, the BRICS expressed their disappointment and concern about the low implementation of reforms to the International Monetary Fund and the World Bank. The member countries underscored the urgency of reforming the structures of government of these institutions in order to make them more democratic and give greater representation to emerging economies. With respect to the World Trade Organization, the BRICS countries expressed their support and willingness to cooperate to conclude the Doha Round. The five countries pledged to draft a Post- Bali Programme at the end of 2014, to follow-up on the Meeting of the WTO Ministerial Conference in 2013 and to facilitate the completion of the Doha Round.

Finally, the BRICS Group reaffirmed its commitment to promoting international cooperation, particularly with developing countries. As a first initiative to achieve this objective, within the framework of the VI Summit, Brazil, Russia, India, China and South Africa met with South American leaders in what represented the first BRICS-UNASUR Summit. UNASUR was represented by the Presidents of Argentina, Cristina Fernández de Kirchner; the Plurinational State of Bolivia, Evo Morales; Chile, Michelle Bachelet; Colombia, Juan Manuel Santos; Ecuador, Rafael Correa; Guyana,

Permanent Secretariat Extra-Regional Relations 38

Donald Ramotar; Paraguay, Horacio Cartes; Peru, Ollanta Humala; Suriname, Desi Boutersi; Uruguay, José Mujica; and the Bolivarian Republic of Venezuela, Nicolás Maduro. The BRICS expressed interest in strengthening relations with South America as a way to increase international cooperation to promote security, economic and social progress, sustainable development and peace (BRICS, 2014). In the words of Narendra Modi, Prime Minister of India, that meeting was aimed at “raising new ideas for a partnership between the BRICS and South America. The BRICS nations have already begun a new chapter with the creation of the Development Bank. This will open up new opportunities for cooperation” (Press Trust of India, 2014).

2. Education and Innovation

India and Latin America and the Caribbean face major challenges in terms of job creation. Their young people represent a demographic bonus that, if exploited, could have a very positive effect on economic growth and on the quality of life of their populations. To do this, they must be able to incorporate millions of young people joining the labour force each year into the formal sector. Cooperation in education and innovation can be an important strategy to absorb not only the young population that is beginning to look for work, but the people that are currently working in the informal sector who pay no taxes on their income, and do not have access to State health services or social security.

In the past decade, India kicked off a great number of successful programmes to increase the education of the population. Examples include the Programme for School Meals started in 2001, which provides 120 million meals per day (it is the world's largest school food programme). In 2008, India started a project to open 6,000 schools of excellence for outstanding children in rural areas. Thus far, it has opened 2,266 schools in 22 States. In 2009, the country started the Rashtriya Madhyamik Shiksha Abiyan Programme, which is aimed at achieving 100% enrolment to secondary education by 2017. Finally, the Programme for Free Access to Education started in 2010 grants free and compulsory education for children aged 6 to 14. Despite the achievements, India still faces significant challenges, particularly in the quality of education and in secondary and higher education (OECD, 2011).

India has also developed a programme for the establishment of centres of excellence for education in Information Technologies. At present, India is the third country with more scientists in the world (Sexenio, 2014). A great deal of India’s success in developing its services sector – particularly in information technologies – is the result of its education and innovation programmes. India has shared its centres of excellence with Dominica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Peru. The main objective of the project is the creation of human capital to develop information technologies and provide training in the use of these technologies in academic, governmental, industrial and commercial sectors. While financing of equipment, courses, their contents and instructors are covered by India, the building and the physical infrastructure are provided by the local government. The Indian company Tata Consultancy Services was responsible for the acquisition, installation and software upgrade for these centres (Panama, Institute of Professional Training and Training for Human Development, 2014).

At present, Chile, El Salvador, Mexico, Peru and Trinidad and Tobago have cooperation agreements with India in the fields of science and technology; Chile, Colombia and Panama have agreements for academic and education cooperation; and Chile also has an agreement on cooperation in agricultural research.

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 39

3. SMEs

In India, micro, small and medium enterprises (MSMEs) contribute with nearly 8% of the GDP, 45% of manufactured products and 40% of exports. After agriculture, SMEs are the main source of employment, as well as a breeding ground for entrepreneurship and innovation. There are MSMEs all around the country and they produce a broad range of products and services to meet the needs of local markets, the global market and national and international value chains.

India has a Ministry for SMEs and has developed a variety of programmes for business development. One of the keys to India’s success in developing this sector has been the creation of clusters, which allow for taking advantage of the infrastructure aimed at specific sectors and for developing of economies of scale. The creation of clusters in India has also brought about other benefits such as reduction of costs, efficient use of resources, facilities to access new technologies, increased bargaining power and a major social impact on communities. At present, there are information technology clusters in Noida, Hyderabad and Bangalore; jewellery clusters in Jaipur; skins and textiles in Agra and Ludhiana; automotive industry clusters in Gurgaon and Pune, others specialized in infrastructure in Delhi (Federation of Indian Chambers of Commerce and Industry and Deloitte, 2010).

Unlike the issue of education and scientific and technological cooperation, cooperation between India and Latin America and the Caribbean in the area of SMEs is in a fledgling stage. The Ministry of SMEs of India has only signed a Memorandum of Understanding with the Secretariat of Economy of Mexico (27 March 2006). Latin America and the Caribbean could make use of the experience of India in creating clusters to develop best practices in the development of small and medium-sized enterprises (Federation of Indian Chambers of Commerce and Industry and Deloitte, 2010). Cooperation in this area can be linked with educational and scientific cooperation in order to seek higher skills for human resources in the region. Similarly, such cooperation could involve the private sector in India and Latin America and the Caribbean so as to develop industries with a comparative advantage in their counterparts. The pharmaceutical, automotive, and services sectors offer great potential.

4. Tourism and transport

Both India and Latin America and the Caribbean have experienced a significant growth in the number of incoming tourists. Thus, tourism has played an increasingly important role in their economies and provides not only business opportunities, but also the possibility to establish stronger links among countries.

India is the 41st tourist destination in the world. In 2012, tourist arrivals in India increased by 4.3% compared to 2011. From 2002 to 2012, India went from receiving 2.4 million international tourists to 6.6 million annually. Nearly 92% of them arrive by air, mainly to Delhi (36%); Mumbai (19%) and Chennai (11%). In Latin America and the Caribbean, only Mexico surpasses India in terms of the number of international tourists it welcomes, with 23.4 million tourists in 2012 (India, Ministry of Tourism, 2012).

In India, foreign currency coming in from tourism was estimated at over US$ 17 billion in 2012 (OECD, 2014C). Tourists come primarily from industrialized countries such as United States, United Kingdom, Canada, Germany, France and Japan, or neighbouring countries such as Bangladesh or Sri Lanka. Latin America and the Caribbean is the region of the world with the lowest flow of tourists to India, lagging behind Africa, Oceania and Eastern Europe. In Latin America and the

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Caribbean, Brazil (with 18.4 thousand), Mexico (with 11.2 thousand) and Argentina (9.8 thousand) are the main countries of origin of tourists travelling to India, and they account for 62% of the region’s flow to that country (India, Ministry of Tourism, 2012). Even though the number of tourists from the region increased by 4.4% between 2011 and 2012, the 63,700 Latin American and Caribbean tourists who visited India during the period accounted for less than 1% of international tourists.

The number of Indian tourists who take vacation abroad has also increased, reaching 14.9 million in 2012 (OECD, 2014C), which makes India a quite attractive country to develop tourism promotion policies. As the Asian country continues to experience high economic growth rates, its growing middle class offers great opportunities for Latin American and Caribbean countries to diversify and increase the number of incoming tourists. Indians who take vacations outside their country travel mainly by air, from the airports at Mumbai, Delhi, Chennai and Cochin. In 2011, the number of Indians who travelled to Brazil reached 21.5 thousand tourists. This positioned Brazil as the first destination in Latin America and the Caribbean for Indian tourists (India, Ministry of Tourism, 2012).

Despite their success in the tourism sector, the flow of tourists between Latin America and the Caribbean and India has not increased substantially. Only Brazil has entered a cooperation agreement on tourism with India through the IBSA Trilateral Forum. Apart from that agreement, there are no other bilateral cooperation agreements in this field. Thus far, air connectivity between Latin America and the Caribbean and India requires scales in the United States and Europe, since there are no direct flights. This has implications in terms of costs and time frames for travelling. Chile, Mexico and Trinidad and Tobago have signed cooperation agreements on air services.

The need to obtain tourist visas is another obstacle to this activity. In Latin America and the Caribbean, only the Plurinational State of Bolivia and Guyana have exempted visa requirements for Indian nationals. Dominica, Ecuador, El Salvador, Haiti, Jamaica, St. Kitts and Nevis, Trinidad and Tobago and Saint Lucia allow them to obtain a visa upon arrival in the country. All the other countries of Latin America and the Caribbean request national Indians to have a visa for entry. In turn, India also requests a visa to international tourists, except those coming from Nepal and Bhutan (India, Ministry of Tourism, 2014).

Cooperation through air services and visa exemption agreements could trigger an increase in the flows of tourists, foreign currency and investment in related services. Similarly, cooperation agreements could be forged between the Ministries of Foreign Affairs to share experiences in developing infrastructure and policies to promote tourism that allow for taking a better advantage of the growth seen in this sector worldwide.

5. Environment and energy

As was the case with China, the growing consumption by the middle class and the increase of production in India have significantly raised the country’s demand for raw materials and energy. Latin America and the Caribbean has become a major supplier in both areas. Not only Venezuela, but also Brazil, Colombia, Ecuador and Mexico have started regular exports of crude oil to India (Vishwanathan, 2014).

Thus far, four Latin American and Caribbean countries have signed cooperation agreements with India in the energy field: Argentina signed a Cooperation Agreement on Peaceful Uses of Nuclear Energy with India; Chile has a Cooperation Agreement on New and Sources; Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 41

Venezuela has a Cooperation Agreement on the Hydrocarbons Sector; and in 2008, Mexico and India reached a Memorandum of Understanding on Cooperation in the area of New and Renewable Energy Sources.

Without a doubt, Venezuela is the best example of the potential of cooperation with India as regards trade and investments in the energy sector. Before 2006, trade between the two countries was nil. At present, Venezuela is India’s main trading partner in Latin America and the Caribbean and has become one of its leading partners worldwide. India not only needs to import oil; it also imports 81 million tons of coal, and for this reason companies such as Coal India Limited are seeking to purchase mines outside India (Federation of Indian Chambers of Commerce and Industry and Deloitte, 2010).

Opportunities for cooperation in the area of energy are not limited to fossil fuels. As a matter of fact, cooperation in this area can also be linked with cooperation in the field of environment protection. The development of renewable energy sources provides an opportunity to combat climate change. India and Latin American and Caribbean countries such as Brazil, Chile and Mexico have great potential for developing wind energy production. India produced 17,365 MW of wind energy in 2012 (Business Standard, 2013); Brazil has a production potential of 143 GW; Chile plans to start seven projects with a capacity of 850 MW; while the Mexican Government has significantly increased investments in this sector in the southwest of the country, and has opened up a huge opportunity for national and foreign investment as a result of the recently approved energy reform (Federation of Indian Chambers of Commerce and Industry and Deloitte, 2010).

The experiences of Argentina in producing solar energy and Brazil in generating could be a hotbed for good practices that could help India develop sectors with potential. India has large deserts in the Northwest region of the country; moreover, it is one of the world's top producers of sugar cane, which is the main input for the production of ethanol.

Brazil and India have already made important achievements as regards cooperation on other issues related to environment protection. The IBSA Trilateral Forum is developing a project among its members and Haiti, which fosters cooperation between South Africa and two countries in Latin America and the Caribbean. The project consists in organizing and mobilizing the community of Carrefour Feuilles (which has a history of street gang violence) for collection and recycling of waste. This project has already generated more than 400 jobs and has joined the community, which was formerly divided into gangs, to achieve a common goal. Thanks to the correct collection and recycling of waste, the incidence of diseases, the risk of floodings and the environmental impacts of community waste have been reduced (IBSA, 2012).

India and Latin America and the Caribbean coincide in various discussion forums on environment protection within the framework of the United Nations. Among them is the Conference on Climate Change, where both India and Latin America and the Caribbean share objectives concerning the need to address the effects of climate change (Estevez, 2013). However, it must be noted that Latin America and the Caribbean has never presented a unified position vis-à-vis the negotiations on climate change, showing a diversity of positions in this regard. Traditionally, Latin America and the Caribbean has operated through formal and informal, regional and multilateral groups such as the Alliance of Small Island States (AOSIS), ALBA, the Cartagena Dialogue for Progressive Action, the Group for Environmental Integrity, the Central American Integration System, the Coalition for Rainforest Nations and the Group of Highly Vulnerable Countries (Garibaldi et al., 2012).

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In the Conference of the Parties of the Framework Convention on Climate Change (COP) India has stressed that the negotiations should respect the current structure of the United Nations Framework Convention on Climate Change and its Annexes, so as to maintain the two categories of countries currently used. This position is shared by Latin America and the Caribbean as a whole. For India, any attempt to reclassify countries in a different way from the one agreed in 1992 would be tantamount to a violation of the mandate of the negotiations. India also wants the process towards the 2015 Agreement On Climate Change to address the four pillars of the Framework Convention (mitigation, adaptation, financial and technological support), as well as capacity building. As regards compliance, India advocates for a mechanism based on the Kyoto Protocol in order to ensure that Annex I countries (industrialized countries) comply with their obligations. For the countries that are not included in Annex I (developing countries and emerging economies), it only suggests the creation of positive incentives to improve compliance (Duyck, 2013).

The foregoing was an account indicating those areas for cooperation where both India and Latin America and the Caribbean have found common ground, as well as mechanisms to outline programmes and proposals to take advantage of rapprochement between both parties. Their participation in multilateral and regional forums allows for understanding the priorities of each party, so as to build deeper and more substantive relations for mutual benefit in the future.

IV. AREAS OF OPPORTUNITY AND RECOMMENDATIONS

India is a heavyweight player in international politics not only because of its own dimensions but also because of its express political will to have an impact on a variety of issues on the global agenda. India is profiled to be an emerging country with global presence. This forces Latin America and the Caribbean to look for rapprochement at the country and regional levels and to gain deeper knowledge about those areas in which both parties could work together for mutual benefit.

The first step that SELA has identified is to point to the existing areas of opportunity which could be developed at the national and the regional level. Without a doubt, Latin America and the Caribbean can benefit from greater trade flows, the reception of more investments, higher yields for its companies operating abroad, a larger number of tourists, and the best practices that India has executed to stand out in areas such as the development of small and medium-sized enterprises or the sector of services with added value.

Latin America and the Caribbean also offer India the opportunity to get closer to a region with potential for growth, with a growing middle class and a young population, as well as stable macroeconomic conditions. Current cooperation is concentrated in few countries and still has a great potential for expansion.

In order to take advantage from the benefits of cooperation with India, Latin America and the Caribbean could outline a strategy to strengthen institutional mechanisms to promote and contribute to consolidate a closer relationship. With this goal in mind, commercial and cooperation recommendations are discussed below so as to boost relations of Latin America and the Caribbean with India.

1. Economic-trade area

Trade and investments are the main variables that explain the renewed links between India and Latin America and the Caribbean. Exports from Latin America and the Caribbean to India have grown at an annual rate of 74%, while imports have experienced an even stronger increase at an Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 43 annual rate of 88%. As a matter of fact, trade with India’s main partners in Latin America and the Caribbean has shown annual growth rates exceeding the two digits between 2009 and 2013. The growth in trade in both directions has been higher than the growth in Latin American and Caribbean trade with the world, which has increased India’s share as a trading partner of Latin America and the Caribbean. Such growth has occurred even though there are important barriers to trade between both parties.

Investment flows between India and Latin America and the Caribbean have also increased significantly over the last decade. Little by little, India is emulating the trend seen in other Asian countries to move from recipients of investment to investors abroad. In 2012, India’s FDI stock reached US$ 118.166 million. On average, between 2006 and 2012 Indian annual investment was seven times higher than the amount invested between 2000 and 2005. Until 2012, 669 Indian parent companies have been registered abroad with more than 1,288 subsidiaries in different countries (International Trade Centre, 2014).

In order to continue to increase economic bonds between India and Latin America and the Caribbean and take advantage of the potential of the relationship, the following actions are suggested with the purpose of creating and strengthening institutional mechanisms to encourage trade and investments in both directions:

 Establishing trade agreements. Trade between India and Latin America and the Caribbean faces significant trade barriers that limit its development. Apart from the Global System of Trade Preferences, India has only partial scope agreements with Chile and MERCOSUR in Latin America and the Caribbean, which are limited to certain products and do not include services. Thus, trade of Latin American and Caribbean countries with India is primarily governed by the tariffs agreed to within the WTO, which are quite high for most of the traded products. Latin America and the Caribbean has the capacity to supply India with products such as coffee, tea, sugar, and alcoholic beverages, meat, eggs, motor vehicles, fats and vegetable and animal oils, but they face the application of tariffs that can range between 100% and 150%, and some of them could even reach its consolidated maximum of 300%. With the negotiation of new agreements that involve more countries and cover more items, trade flows between India and Latin America and the Caribbean would benefit from greater certainty and greater access to markets. Undoubtedly, such action would increase trade, would create greater opportunities for investment and would generate a stronger political rapprochement.

 Investment agreements. As in the case of trade agreements, there are few investment agreements between India and Latin America and the Caribbean. The negotiation and establishment of more Agreements on Reciprocal Promotions and Protection of Investments (ARPPIs) could generate an incentive to increase capital flows between India and Latin America and the Caribbean. Having a larger number of agreements that provide greater certainty and predictability to capital flows could boost dynamism of investments between India and Latin America and the Caribbean – particularly the flows from Latin America and the Caribbean to India, which are still at low levels.

 Negotiation and implementation of agreements on double taxation. These agreements could facilitate economic transactions between the parties, which would encourage business and trade. Thus, taxpayers in Latin America and the Caribbean and India could have a unified, simplified tax situation and avoid double taxation.

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 Promotion of investments. Through the dissemination of investment projects in the areas of interest of each party, such as development of physical infrastructure, it should be possible to channel FDI flows between Latin America and the Caribbean and India. In addition, the dissemination of information on sources of funding to enable participation in these projects could boost capital flows among those countries.

 Financing. The new BRICS Development Bank and the first BRICS-UNASUR Summit, in which its creation was formally announced, raise expectations about a possible increase in the development of new investment projects. It is important to follow up on this initiative and complement it with greater rapprochement between development banks and investment funds in Latin America and the Caribbean and India, and to encourage the creation of credit lines to promote trade between them.

 Market research to identify specific opportunities. With the conduction of market research to analyze current trade patterns and opportunities between India and Latin America and the Caribbean it would be possible to identify those products and services exchanges that can be increased and thus define concrete actions to effectively take advantage of those opportunities. This study has determined that in terms of imports, there are products such as pearls and precious stones for which India could meet a considerable percentage of the joint demand of the Latin American and Caribbean countries, such as: gums, resins and other vegetable extracts; silk, textile fibres, carpets, plaiting materials, coffee and tea, cereals, lead and articles thereof, products of air navigation, and cotton. The current coverage of India for such products is between 5% and 10%, and those products also account for a lower percentage than India’s exportable offer, which indicates that India could cover a larger portion of the market.

 In the case of exports, Latin America and the Caribbean need to add more value to the raw materials that it currently exports to India. There is a variety of products for which Latin America and the Caribbean could cover a large percentage of Indian demand, but at present the region only sells a small percentage of its exportable offer and, therefore, ends up covering little demand for imports of those products. Such is the case of machines and nuclear reactors; appliances and electrical equipment; cast iron and steel; plastic materials; fats and oils of animal or vegetable origin; ores and slags; maritime navigation products; chemical products; fertilizers; paper and cardboard; and furniture.

 To promote the creation of bilateral Chambers of Commerce in order to encourage greater integration among the productive sectors of the countries involved. The creation of such organizations can be a good way to get the private sectors of both sides closer together because it would provide a tool for more information on technical issues related to trade and investment, and to promote greater contacts through business missions and identification of opportunities.

Employers should get familiar with the particularities of the Indian market and the preferences of its 300 million middle-class consumers. The business opportunities identified in this document can be used by Commerce Chambers that coordinate and develop strategies to link entrepreneurs in Latin America and the Caribbean with their counterparts in India. These institutions could give impetus to the creation of businesses, which are translated into an increase not only in trade flows, but also in new investments.

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 To develop investment projects in Latin America and the Caribbean in sectors such as chemicals, mining, metallurgical industry, agribusiness, processed food, auto parts, information technologies, communications, financial services and tourism.

2. Technical cooperation

India and Latin America and the Caribbean have recently created mechanisms for cooperation involving all or some countries in the region (First Summit India-CELAC, IBSA or statements of the BRICS) covering agendas with substantive issues. Latin America and the Caribbean have an opportunity to increase trade, investment and tourism, and to gain knowledge and experiences on policies that encourage economic development. Economic cooperation can bring about opportunities for progress in specific areas such as exchange of statistical information, tourism, energy and hydrocarbons, infrastructure, science and technology, development of SMEs, and business promotion or financing, just to mention some key areas.

Here are some lines of action which could be subject to consideration of the member countries of SELA, in order to help strengthen cooperation between India and Latin America and the Caribbean.

 Generate exchanges of technical and scientific personnel in order to improve public administration, develop and replicate techniques in different production processes, and encourage innovation to promote a faster and more sustainable development.  Create working groups for collecting and harmonizing regional statistical data on trade, economy, tourism, labour, education, demography and social issues, so as to allow access to more complete and accurate information, and enable better public policy decision-making. Better information is essential for identifying opportunities and areas of cooperation. In this regard, it is possible to analyze the experiences gained by India and Brazil through the BRICS initiative in this area and identify best practices that could be replicated in other Latin American and Caribbean countries.  Create mechanisms to promote cultural and educational exchanges mainly by establishing regional studies centres, scholarships and cultural events and exchanges.  Improve sea and air connectivity between the countries of Latin America and the Caribbean and India, and develop cooperation agreements to facilitate maritime and air transport services. Strengthening direct maritime services between Latin America and the Caribbean and India would ensure greater viability for trade between them. Nowadays, bilateral trade flows depend a lot on other Asian countries and Europe. Better sea and air connectivity would result in lower costs and would strengthen trade, business, tourist and cultural links.  Loosen restrictions on the movement of people between India and Latin America and the Caribbean, which can include suppressing visas or simplifying arrangements for them, and allowing for obtaining them at airports. Such action could be accompanied by promotion policies, as well as cooperation agreements on tourism to establish ways to exchange and disseminate information for operators and potential tourists.  Increase collaboration in the sectors of information and software technologies with the creation of more Indian centres of excellence for education in information technologies in more Latin American and Caribbean countries.  Create collaboration mechanisms for the development of SMEs, mainly at the level of governments, thus allowing for exchanges of information and experiences in granting loans to incubate new businesses, and implementing programmes to support SMEs.

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 Cooperate in the area of attention to youth. Unemployment, the growing number of young people joining the labour force and the population currently working in the informal sector make it necessary to develop cooperation in this field. The promotion of new agreements and exchanges among the relevant ministries would allow for sharing experiences in public and fiscal policies for young people entering the labour force and for companies that hire people entering the labour market for the first time.  Exchange experiences in urban development. India is experiencing a significant urban growth, which poses challenges in terms of urban planning and infrastructure, provision of services and transport. Without a doubt, exchanges with Latin America and the Caribbean in this area represent an opportunity, not only in terms of public administration, but it is also attractive in terms of collaboration and business for builders, service providers and think- tanks.  Exchange and cooperation in energy. India’s growing demand for energy opens up a very attractive niche opportunity for several countries in Latin America and the Caribbean in terms of trade exchanges and cooperation for the development of renewable energy sources. The development of joint programmes, coordination among the institutes and ministries responsible for the energy sector, as well as greater links between the private sectors could be an important source of business, in addition to having important implications for the rest of the economy. This is also an area of opportunity for the development of sustainable and renewable energy sources that satisfy the need for preserving natural resources and the environment.

3. Tools to promote relations between India and Latin America and the Caribbean

The creation of a solid institutional system is fundamental to promote bilateral relations. However, thus far India coincides with all the countries of Latin America and the Caribbean only in the UN and the WTO. This creates a lack of knowledge of the potential and the possibilities for collaboration existing between Latin America and the Caribbean and India.

In this regard, SELA can be an ideal player to support Latin American and Caribbean countries in developing a strategy for cooperation and rapprochement towards India. This strategy will require an action plan, in which SELA could serve as a facilitating agent to promote implementation of the recommendations contained in this document. For such purpose, the following activities are proposed:

 Conduction of seminars, which may be thematic, and would examine regional opportunities or indicate possible areas of cooperation at the bilateral level. The section of this document that deals with cooperation identified potential topics for such seminars. Those topics include the development of SMEs, tourism, energy, technical and scientific cooperation, education, employment, urban development and infrastructure projects. The participation of the private sector, chambers of commerce and investors will undoubtedly be of great benefit for conducting such seminars.  Market studies, which could serve as a basis to take advantage of the diversity of opportunities to increase trade in both directions. It is essential to identify specific and attractive opportunities that can increase the private sector’s political will to strengthen ties with India and take advantage of the opportunities offered by greater collaboration.  Reinforce dissemination through the regular publication, through contacts and networking, of the opportunities to explore and exploit as regards trade between India and Latin America and the Caribbean. Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 47

 To follow up and promote the conduction of meetings between India and Latin America and the Caribbean as a region, so as to facilitate a working agenda that allows for bringing closer stakeholders on both sides.

In recent years, has brought about challenges for which international cooperation has become crucial. In addition to this advantage, cooperation among developing countries offers the opportunity to exchange experiences towards a common goal: increase well-being of the population. Among developing economies, India is the one that offers more opportunities and that is projected to have one of the largest economic growth rate ever seen.

In recent decades, China has outdone India in almost all dimensions of development, which has made it the main global target for trade, cooperation and business for all the Latin American and Caribbean countries. However, now there are signs that India will have a more dynamic economic development in the coming decades, and that it could outdo China in the long term because of the size of its economy and its population.

India is shaping up to become a world power in the course of the following decades. Its economic growth and its demographic bonus make India a very attractive country as a target market for its current and potential consumption of goods and services. In the coming decades, India is expected to become one of the main poles for growth of the global economy, and by 2050 it might consolidate as the second largest economy in the world.

India also has huge challenges ahead, such as the fight against poverty. Health care, education and access to basic services, the development and improvement of its infrastructure, greater environment protection, finding more renewable energy sources, ensuring prudent management of its macro-economics, improving its regulations, and reducing corruption.

It is notorious that India and Latin America and the Caribbean share many of its advantages and challenges. The benefits that could result from greater collaboration between the two parties are important. Those benefits, coupled with the importance that India has and will continue to have within the international context, make it indispensable for Latin America and the Caribbean to gather greater political will in order to outline a well-defined strategy for cooperation and rapprochement towards India. Such collaboration has important commercial, financial, economic development and geopolitical implications.

The recent change of government in India provides a good opportunity to rethink the way in which cooperation between India and Latin America and the Caribbean will be developed. The new Indian government counts on a great political capital and, above all, it has shown willingness and desire to strengthen and diversify the country’s international relations, especially with developing countries and, particularly, with in Latin American and Caribbean countries.

This document pinpoints the potential for cooperation between India and Latin American and Caribbean countries. Thereby, SELA has sought to identify the areas where progress has been achieved and the opportunities to contribute to defining an agenda and a roadmap for actions towards greater collaboration between Latin America and the Caribbean and India. SELA could serve as a forum for outlining and implementing the proposals presented herein.

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ANNEX I

DIPLOMATIC RELATIONS BETWEEN INDIA AND LATIN AMERICA AND THE CARIBBEAN

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Country in Latin Embassies and Consulates of Embassies and Consulates in Latin America America and the Latin America and the Caribbean and the Caribbean Caribbean in India Argentina Embassy (New Delhi) Embassy (Buenos Aires) Consulate (Mumbai) Bolivia Embassy (New Delhi) Brazil Embassy (New Delhi) Embassy (Brasilia) Consulate (Calcutta) Consulate (Sao Paulo) Belize Consulate (New Delhi) Chile Embassy (New Delhi) Embassy (Santiago) Consulate (Chennai) Consulate (Calcutta) Consulate (Mumbai) Costa Rica Embassy (New Delhi) Colombia Embassy (New Delhi) Embassy (Bogota) Cuba Embassy (New Delhi) Embassy (Havana) Dominican Republic Embassy (New Delhi) Ecuador Embassy (New Delhi) El Salvador Embassy (New Delhi) Consulate (Bangalore) Consulate (Calcutta) Consulate (Mumbai) Guatemala Embassy (New Delhi) Embassy (Guatemala) Guyana Embassy (New Delhi) High Commissioner (Georgetown) Haiti Consulate (Mumbai) Jamaica Consulate (New Delhi) High Commissioner (Kingston) Mexico Embassy (New Delhi) Embassy (Mexico) Consulate (Calcutta) Consulate (Mumbai) Nicaragua Consulate (New Delhi) Panamá Embassy (New Delhi) Embassy (Panama) Consulate (Mumbai) Peru Embassy (New Delhi) Embassy () Consulate (Calcutta) Consulate (Mumbai) Paraguay Embassy (New Delhi) Suriname Embassy (New Delhi) Embassy (Paramaribo) Trinidad and Tobago Embassy (New Delhi) High Commissioner (Port of Spain) Uruguay Embassy (New Delhi) Consulate (Mumbai) Venezuela Embassy (New Delhi) Embassy (Caracas) Total countries 24 14 Source: India, Ministry of External Affairs.

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ANNEX II

COOPERATION AGREEMENTS ENTERED INTO BETWEEN INDIA AND LATIN AMERICAN AND CARIBBEAN COUNTRIES

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Country in Latin America Agreement Date of signing and the Caribbean Argentina Agreement on cooperation and mutual assistance in 26 August 2011 customs matters Agreement for cooperation in peaceful uses of nuclear 23 September 2010 energy Agreement on cooperation between foreign service 30 August 2000 institutes Agreement for the promotion and reciprocal protection of 20 August 1999 investments Economic cooperation agreement 24 January 1985 Bahamas Bilateral cooperation agreement 24 January 2006 Memorandum of Understanding on consultations between 8 September 2005 Ministries of International Affairs Bolivia Agreement on cooperation in cultural matters 8 December 1997 Brazil Memorandum of Understanding on consultations between 22 February 1992 Ministries of International Affairs Memorandum of Understanding for cooperation in the area 8 April 2002 of blending of ethanol fuels Agreement on lucrative occupations for relatives of 2 February 2003 members of the consular service Agreement on cooperation in defence matters 1 December, 2003 Agreement on audio and video co-productions 4 June 2007 Extradition treaty 16 April 2008 Agreement on scientific and technological cooperation 12 September 2008 Chile Memorandum of Understanding on cooperation in 17 March 2009 education Memorandum of Understanding on cooperation in the area 17 March 2009 of geology and mineral resources Memorandum of Understanding on cooperation in the area 17 March 2009 of new and renewable energy sources Memorandum of Understanding on Antarctic cooperation 21 April 2008 Agreement on air services 21 April 2008 Memorandum of Understanding on sports cooperation 21 April 2008 Agreement on scientific and technological cooperation 21 April 2008 Memorandum of understanding on cooperation in agricultural research and education Memorandum of understanding on sanitary and 20 January 2005 phytosanitary matters for the bilateral trade in animal and vegetable products Agreement on the exemption of the visa requirement for 24 April 2003 holders of diplomatic and official passports Agreement on Animal Health 24 April 2003 Phyto and zoo-sanitary Agreement 19 December 2001 Memorandum of Understanding on cooperation between 10 August 2000 foreign service institutes Memorandum of Understanding on Cooperation between 10 August 2000 diplomatic academies Memorandum of Understanding for consultations between 2 June 1995 Ministries of Foreign Affairs

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Country in Latin America Agreement Date of signing and the Caribbean Cultural cooperation agreement 13 January 1993 Colombia Agreement to avoid double taxation and prevent tax evasion 13 May 2011 Memorandum of Understanding for cooperation in the area 4 May 2011 of geology and mineral resources Agreement for the promotion and reciprocal protection of 10 November 2009 investments Memorandum of Understanding for cooperation in 31 May 2007 transport systems and urban transport planning Memorandum of Understanding for cooperation between 11 June 2002 foreign service institutes Agreement on visas exemption for diplomatic passports 5 March 2001 Academic cooperation Agreement 5 March 2001 Caribbean Agreement for the establishment of a joint commission for 25 November 2003 Community consultation, cooperation and coordination Cuba Memorandum of Understanding for cooperation between 13 March 2002 foreign service institutes Dominica Memorandum of understanding for the creation of a centre 14 October 2011 of excellence in the area of information technologies in Dominica Ecuador Cultural cooperation agreement 18 July 2006 Arrangement regarding lucrative occupations for relatives of 18 July 2006 members of the consular service Memorandum of Understanding for cooperation between 18 July 2000 foreign service institutes El Salvador Agreement on scientific and technological cooperation 21 August 2012 Memorandum of Understanding for cooperation between 2 February 2004 foreign service institutes Guatemala Memorandum of Understanding for cooperation between 4 May 2005 foreign service institutes Haiti Memorandum of Understanding for bilateral cooperation 27 September 1996

Mexico Agreement on cooperation and mutual assistance in 15 October 2012 customs matters Extradition treaty 10 September 2007 Treaty on mutual legal assistance in criminal matters 10 September 2007 Agreement for promotion and reciprocal protection of 21 May 2007 investments Memorandum of Understanding for cooperation between 21 October 2005 the Ministries of Foreign Affairs Agreement between the Government of the United States of 10 September 2007 Mexico and the Government of the Republic of India to avoid double taxation and prevent fiscal evasion in the area of income taxes, signed in New Delhi Agreement on scientific and technical cooperation Cultural Agreement 1975 Cultural Exchange Programme 1975 Educational Exchange Programme 2005 2005 Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 57

Country in Latin America Agreement Date of signing and the Caribbean Agreement on visa exemptions for diplomatic and official 2005 passports Memorandum of Understanding on Cooperation for Micro, 2006 small and medium-sized industries Treaty on mutual legal assistance in criminal matters 2007

Agreement on air services 2008 Memorandum of Understanding on cooperation in the area of new and renewable energy sources Nicaragua Agreement on cultural cooperation 9 September 1986 Panama Agreement on cultural and educational cooperation 2 February 2001 Memorandum of Understanding for cooperation between 2 February 2001 foreign service institutes Peru Memorandum of Understanding for cooperation in the area 13 July 2012 of geology and mineral resources Protocol of cooperation in science and technology 22 January 2010 Agreement on visa exemptions for diplomatic passports 3 June 2003 Agreement on cooperation between foreign service 26 May 1997 institutes Agreement on cultural cooperation 25 January 1987 Dominican Memorandum of Understanding on consultations and 31 May 2001 Republic review of bilateral relations

Agreement on air services 6 January 2012 Programme on cultural exchanges 2012-2014 6 January 2012 Technical cooperation agreement 6 January 2012 Agreement on promotion and reciprocal protection of 12 March 2007 Trinidad and investments Tobago Agreement on an inter-governmental commission for 5 February 2003 political, economic, scientific, technical and cultural cooperation Memorandum of Understanding for bilateral consultations 24 January 1997 Cultural cooperation agreement 13 March 1997 Uruguay Agreement to avoid double taxation and prevent tax evasion 8 September 2011 Agreement on promotion and reciprocal protection of 11 February 2008 investments Agreement on visa exemptions for diplomatic passports 6 December 1999 Venezuela Memorandum of understanding for establishing a joint 5 March 2005 commission Agreement on cooperation in the hydrocarbon sector 5 March 2005 Memorandum of Understanding for cooperation between 2 September 2004 foreign service institutes Memorandum of Understanding for consultations between 4 March 1997 Ministries of Foreign Affairs 21 countries 76 agreements Source: India, Ministry of Foreign Affairs (2014).

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ANNEX III

AGREEMENTS SIGNED WITHIN THE FRAMEWORK OF IBSA

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 61

Agreement Signing date Memorandum of Understanding on agriculture 13 September 2006 Memorandum of Understanding to establish a group on biofuels 13 September 2006 Framework agreement for cooperation in the area of information 13 September 2006 society Action Plan for facilitation of trade standards and technical 13 September 2006 regulations Agreement on sea transport and trade 13 September 2006 Memorandum of Understanding on wind energy 17 October 2007 Memorandum of Understanding on environment 17 October 2007 Memorandum of Understanding on culture 17 October 2007 Memorandum of Understanding on health 17 October 2007 Memorandum of Understanding on public administration 17 October 2007 Cooperation agreement on higher education 17 October 2007 Cooperation agreement on fiscal and customs administration 17 October 2007 Cooperation agreement in the area of social development 17 October 2007 Cooperation agreement on 15 October 2008 Five-year Action Plan for civil aviation projects 15 October 2008 Five-year Action Plan for maritime projects 15 October 2008 Memorandum of Understanding on facilitation of trade standards 15 October 2008 and technical regulations Cooperation agreement on tourism 15 October 2008 Memorandum of Understanding for cooperation in the development 15 October 2008 of women and gender equity programmes Memorandum of Understanding on human settlements 15 October 2008 Cooperation agreement on science, technology and innovation 15 April 2010 Memorandum of Understanding on solar energy 15 April 2010 Memorandum of Understanding on cooperation between foreign 18 October 2011 service institutes Source: Official Web site of the India-Brazil-South Africa Dialogue Forum (2014).

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 63

ANNEX IV

INDIAN COMPANIES WITH THE LARGEST NUMBER OF SUBSIDIARIES BY SECTOR

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 65

Number of Number of Parent company with largest Industry parent subsidiaries number of subsidiaries companies

Total (Services and goods) 667 1.288 Nikas Gems Wholesale and retail trade 312 465 Mill Max Tools P Limited Real estate, rental and business activities 164 272 TATA SONS LIMITED Transport, storage and communications 92 161 ENTERPRISE H M Other service-related activities 88 126 FLISTEX MAGNETICS LTD Other community, social and personal 52 150 Nikas Gems service activities Financial intermediation 38 58 STATE BANK OF INDIA DR. REDDY'S LABORATORIES Manufacture of chemical products and 37 69 substances LIMITED HINDAMÉRICA LATINA Y EL 35 67 Common metals and metal products CARIBEO INDUSTRIES LIMITED SHAPOORJI PALLONJI & 34 42 Construction COMPANY LIMITED HINDAMÉRICA LATINA Y EL Manufacture of machinery and electrical 33 64 appliances CARIBEO INDUSTRIES LIMITED MOTHERSON SUMI SYSTEMS 29 35 Manufacture of machinery and equipment LIMITED Manufacture of textile and leather products 26 37 KAMA HOLDINGS LIMITED MOTHERSON SUMI SYSTEMS Manufacture of motor vehicles, trailers and 24 33 semi-trailers LIMITED HINDAMÉRICA LATINA Y EL Manufacture of furniture; manufacturing 20 38 industries CARIBEO INDUSTRIES LIMITED Social and health services 19 21 RANDSTAD INDIA LIMITED Mining and quarrying 18 18 G C L International Hotels and restaurants 16 22 Gear - Up - Industries Manufacture of rubber and plastic products 13 18 Sai Udyog Limited Production of wood and wood products 13 13 BILTUBE INDIA LIMITED manufacturing Chambal Constructions Private Manufacture of food products and 12 12 beverages Limited Saboo Holdings (Mumbai) Manufacturing of optical, medical and 12 16 precision instruments and watchmaking Private Limited UNIFIED ELECTRO-TECH 9 9 Extraction of crude oil and natural gas LIMITED Manufacture of other non-metallic mineral 8 11 PUNJ LLOYD LIMITED products

Permanent Secretariat Extra-Regional Relations 66

Number of Number of Parent company with largest Industry parent subsidiaries number of subsidiaries companies

Public administration and defence; Vepco Bio-Tech Private compulsory affiliation social security 8 11 Limited schemes Leader High Pressure Fitting Publishing and printing activities and 7 13 reproduction of recordings India Limited Agriculture, livestock, hunting 6 10 Sneha Insulation P Limited Manufacture of coke, refining oil and 5 10 TATA STEEL LIMITED nuclear fuel products Recycling 5 5 Rubber Craft Industries Teaching 3 3 Naga Pumps Private Limited Fishing and forestry 2 2 Shila International Electricity, gas, steam and hot water supply 1 1 VA TECH WABAG LIMITED Source: Prepared by the author with data from the International Trade Centre, Investment Map (2014).

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 67

ANNEX V

IMPORTS MADE BY LATIN AMERICA AND THE CARIBBEAN FROM INDIA AND THEIR POTENTIAL IN LAC MARKETS, 2013

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 69

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) Mineral fuels, mineral oils and products from 27 their distillation 4608.642 168940.45 69571.281 41.18% 2.73% 6.62% Motor vehicles, tractors, cycles, other land 87 vehicles, parts thereof 1741.422 103721.984 13800.069 13.30% 1.68% 12.62% Organic chemical 29 products 1498.781 34456.042 13340.364 38.72% 4.35% 11.23% Machines, nuclear reactors, boilers, equipment and 84 mechanical devices 813.93 161532.348 13126.148 8.13% 0.50% 6.20%

30 Pharmaceutical products 792.073 27880.834 11731.941 42.08% 2.84% 6.75% Machines, electrical devices and equipment, their parts; recording 85 devices 739.547 160410.022 11275.864 7.03% 0.46% 6.56% Unspecified materials 99 elsewhere 454.436 24060.057 3310.121 13.76% 1.89% 13.73% Synthetic or artificial 54 filaments 444.485 4303.445 2680.862 62.30% 10.3% 16.58%

52 Cotton 430.917 4614.86 11293.952 244.73% 9.34% 3.82%

72 Cast iron, iron and steel 406.376 23148.315 10206.482 44.09% 1.76% 3.98% Plastic materials and 39 articles thereof 359.704 49445.643 6222.703 12.58% 0.73% 5.78% Apparel and clothing accessories, excluding 62 knitted fabric 338.703 7321.425 8743.4 119.42% 4.63% 3.87%

38 Other chemical products 334.487 17417.829 3398.007 19.51% 1.92% 9.84% Articles of cast iron, iron 73 or steel 281.65 25231.434 7347.626 29.12% 1.12% 3.83% Rubber and rubber 40 goods 272.82 19216.737 2974.672 15.48% 1.42% 9.17% Apparel and clothing 61 accessories, knitted 264.307 7373.555 6959.257 94.38% 3.58% 3.80% Tanning / dyeing extracts; tannins and 32 their derivatives; paints 246.421 6504.038 2616.524 40.23% 3.79% 9.42% Aluminium and 76 aluminium articles 204.194 9001.856 2078.003 23.08% 2.27% 9.83% Discontinuous man- 55 made staple fibres 200.655 3538.258 2185.628 61.77% 5.67% 9.18%

Permanent Secretariat Extra-Regional Relations 70

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) Photography, cinematography, optics, measurement 90 instruments 128.53 29724.195 2288.877 7.70% 0.43% 5.62% Fine or cultivated pearls, precious, semiprecious 71 and similar stones 127.512 3673.095 44157.662 1202.19% 3.47% 0.29% Other made-up textile 63 articles; assorted sets 105.303 2674.929 4712.82 176.18% 3.94% 2.23% Articles of leather; garnishing articles, 42 saddlery, travel articles 80.501 2934.409 2513.188 85.65% 2.74% 3.20% Essential oils and resinoids; perfumes, 33 toilet preparations 73.744 9088.333 1619.624 17.82% 0.81% 4.55%

Tools, cutlery items, 82 metal cutlery 69.742 5399.058 916.272 16.97% 1.29% 7.61% Gums, resins and other vegetable saps and 13 extracts 69.538 523.731 3066.362 585.48% 13.2% 2.27% Coffee, tea, maté and 09 spices 69.264 1177.084 2885.2 245.11% 5.88% 2.40% Footwear, legwarmers, boots and similar articles 64 and parts thereof 67.567 6638.7 2609.804 39.31% 1.02% 2.59% 70 Glass and glass articles 57.089 3989.043 686.758 17.22% 1.43% 8.31% Carpets and other soil coverings made with 57 textile materials 48.937 589.088 1715.697 291.25% 8.31% 2.85% Furniture; surgical medical furniture; articles 94 of bedding and similar 45.346 10736.485 1193.881 11.12% 0.42% 3.80% Inorganic chemicals; inorganic and organic 28 metal composites 41.796 8412.223 1466.232 17.43% 0.50% 2.85% Soaps, organic surface- active agents, preparations to wash, 34 etc. 36.012 4416.519541.973 12.27% 0.82% 6.64% Miscellaneous 96 manufactured articles 34.695 3518.536 510.948 14.52% 0.99% 6.79% Fats and oils of animal or vegetable origin; edible 15 fats; waxes 33.052 6654.247 984.201 14.79% 0.50% 3.36% Tobacco and 24 manufactured tobacco 32.531 1209.274 1084.694 89.70% 2.69% 3.00% Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 71

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) substitutes

Oil seeds and oleaginous fruits; seeds and various 12 fruits 30.326 5456.81 1880.345 34.46% 0.56% 1.61% Miscellaneous manufactured articles of 83 common metals 29.872 5067.433 502.597 9.92% 0.59% 5.94% Articles of stone, plaster, cement, asbestos, mica 68 or similar materials 27.749 2707.914 1390.707 51.36% 1.02% 2.00% Salt; sulphur; earths and stone; plastering materials, lime and 25 cement 25.569 3333.299 2037.435 61.12% 0.77% 1.25% Paper, cardboard; articles of pulp, paper 48 and cardboard pulp 25.363 14709.734 1141.261 7.76% 0.17% 2.22% Copper and copper 74 articles 21.627 7014.68 3066.552 43.72% 0.31% 0.71% 69 Ceramic products 20.157 3606.554 559.327 15.51% 0.56% 3.60% Preparations of cereals, flour, starch, starch or 19 milk; pastry 18.057 3729.527 491.187 13.17% 0.48% 3.68% Fish and crustaceans, molluscs and other 03 aquatic invertebrates 11.107 3124.166 5033.651 161.12% 0.36% 0.22% Legumes and vegetables, edible plants, 07 roots and tubers 11.036 2286.315 1404.373 61.43% 0.48% 0.79% Wadding, felt, nonwovens; special 56 yarns; twines, etc. 10.462 1921.586 352.623 18.35% 0.54% 2.97% Editorial products, for the press and other 49 graphic industries 9.933 2426.829 349.125 14.39% 0.41% 2.85% 31 Fertilizers 8.996 15718.916 75.61 0.48% 0.06% 11.90% Special woven fabrics; tufted textile surfaces; 58 lace 8.175 997.493 397.534 39.85% 0.82% 2.06% Edible nuts; peels of 08 citrus fruit or melons 7.79 3399.753 1676.457 49.31% 0.23% 0.46% Toys, games, items for recreation or for sports; 95 parts 7.525 6003.125 274.668 4.58% 0.13% 2.74% Other vegetable textile 53 fibres; yarns and fabrics 7.463 88.467 326.885 369.50% 8.44% 2.28%

Permanent Secretariat Extra-Regional Relations 72

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) of paper

Albuminoid substances; modified starch or 35 starch-based products 6.799 2444.699 353.09 14.44% 0.28% 1.93% 60 Knitted fabrics 6.692 2555.156 256.497 10.04% 0.26% 2.61% Gunpowder and explosives; pyrotechnic 36 articles; matches 6.212 624.103 92.332 14.79% 1.00% 6.73% Wood, charcoal and 44 articles of wood 6.07 3637.712 351.497 9.66% 0.17% 1.73% 10 Cereals 5.544 16949.844 11592.455 68.39% 0.03% 0.05% Impregnated, coated, covered or laminated 59 fabrics 5.317 2104.86239.933 11.40% 0.25% 2.22% Hides and skins (except 41 furskins) 4.92 1400.841 1349.059 96.30% 0.35% 0.36% Vehicles and material for roads or similar and parts thereof; 86 mechanical devices 4.7 3127.297 192.392 6.15% 0.15% 2.44% Waste, waste from the food industries; food for 23 animals 4.594 7158.358 3697.493 51.65% 0.06% 0.12% Sugars and sugar 17 confectionery 4.179 3281.951 1179.991 35.95% 0.13% 0.35% Wool and animal hair, fine or coarse; yarns and 51 fabrics of horsehair 3.956 340.745 163.36 47.94% 1.16% 2.42% 75 Nickel and nickel articles 3.855 409.438 503.077 122.87% 0.94% 0.77% 21 Food preparations 3.851 5435.775 567.525 10.44% 0.07% 0.68% Preparations of vegetables, vegetables, fruit or other parts of 20 plants 3.219 3196.55 461.858 14.45% 0.10% 0.70% Headgear and parts 65 thereof 2.83 441.743 42.791 9.69% 0.64% 6.61% Beverages, spirits and 22 vinegar 2.628 5326.874 438.238 8.23% 0.05% 0.60% Feathers, down preparations and articles of feathers; artificial 67 flowers 2.252 203.071 367.019 180.73% 1.11% 0.61% Live plants and 06 floricultural products 1.815 316.6 80.084 25.30% 0.57% 2.27% 50 Silk 1.804 40.629 164.301 404.39% 4.44% 1.10% 81 The other base metals; 1.719 676.049 73.216 10.83% 0.25% 2.35% Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 73

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) cermets; manufacturing of these materials Plaiting materials, other products of plant origin, 14 not expressed in others 1.664 25.163 64.707 257.15% 6.61% 2.57% Manufactures of plaiting 46 materials, basketware 1.492 55.071 2.595 4.71% 2.71% 57.50% Milled products; malt; starch; inulin; wheat 11 gluten 1.371 2265.539 319.13 14.09% 0.06% 0.43% Photographic or cinematographic 37 products 1.297 1222.825 25.232 2.06% 0.11% 5.14% Weapons and ammunition, parts 93 thereof and accessories 1.167 345.888 63.807 18.45% 0.34% 1.83% Fur, fur garments; factitious and artificial 139.11 43 fur 0.964 59.382 0.693 1.17% 1.62% % Other products of animal origin, not included in 05 other chapters 0.945 566.577 136.116 24.02% 0.17% 0.69% Preparations of meat, of fish, or of crustaceans 16 and molluscs 0.879 2094.737 121.77 5.81% 0.04% 0.72% 79 Zinc and zinc articles 0.877 452.392 495.725 109.58% 0.19% 0.18% Musical instruments; parts and accessories 92 thereof 0.783 423.2 17.099 4.04% 0.19% 4.58% Milk and dairy products; 04 bird eggs; natural honey 0.653 5545.782 737.603 13.30% 0.01% 0.09% 91 Watchmaking 0.556 1512.674 90.768 6.00% 0.04% 0.61% Pieces of art, collectable 97 items or antiques 0.426 227.306 280.956 123.60% 0.19% 0.15% Cocoa and its 18 preparations 0.254 1625.56 82.871 5.10% 0.02% 0.31% Umbrellas, sun umbrellas, seat sticks, 66 whips 0.152 169.341 2.188 1.29% 0.09% 6.95% 26 Ores, slag and ash 0.149 4841.103 2388.949 49.35% 0.00% 0.01% Aerial or spatial 88 navigation 0.133 8648.281 4151.795 48.01% 0.00% 0.00% 45 Cork and cork articles 0.086 121.136 2.546 2.10% 0.07%3.38% 78 Lead and lead articles 0.052 352.278 213.169 60.51% 0.01%0.02% Meat and edible meat 02 offal 0.026 8567.416 4770.622 55.68% 0.00% 0.00%

Permanent Secretariat Extra-Regional Relations 74

Imports LAC Possible Share Exports coverage of

from India LAC imports Chap. From From World (A)/(B Product to World with exports (A)/(C) SA India (A) (B) ) (C) from India (C)/(B) 80 Tin and tin articles 0.019 201.167 89.254 44.37% 0.01% 0.02% Maritime and river 89 navigation 0.001 25306.104 3597.492 14.22% 0.00% 0.00% 01 Live animals 0 1639.608 12.504 0.76% 0.00% 0.00% Pulp of wood or of other fibrous cellulosic 47 material; paper 0 1965.298 0.159 0.01% 0.00% 0.00% Materials specified only 98 in the chapter 0 0 0 0.00% 0.00% 0.00% All products 15932.84 1168977.23 336611.38 28.80% 1.36% 4.73% Source: Prepared by the author with data from the International Trade Centre, Trade Map (2014B). Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 75

ANNEX VI

EXPORTS FROM LATIN AMERICA AND THE CARIBBEAN TO INDIA AND THEIR POTENTIAL IN THE INDIAN MARKET, 2013

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 77

Exports from Latin Possible America and the coverage Caribbean Imports to of India Share

India from imports Chap. Product World with SA To India To World (A)/(B (C) exports (A)/(C) (A) (B) ) from LAC (B)/(C) Mineral fuels, mineral oils and products of their 27 distillation 7579.14 161212.641 184194.009 87.5% 4.70% 4.11% 26 Ores, slag and ash 2604.71 76321.833 8485.222 899.5% 3.41% 30.70% Fats and oils of animal or vegetable origin; edible 15 fats; waxes 1216.68 10623.83 9819.957 108.2% 11.45% 12.39% Sugars and sugar 17 confectionery 436.714 17921.727 643.821 2783.7% 2.44% 67.83% Fine or cultivated pearls; precious, semiprecious and 71 similar stones 394.316 30259.259 67499.912 44.8% 1.30% 0.58% Machines, electrical devices and equipment, their parts; 85 recording devices 241.152 90377.326 29790.256 303.4% 0.27% 0.81% Machines, nuclear reactors, boilers, mechanical 84 equipment and devices 192.678 71448.268 31945.783 223.7% 0.27% 0.60% 72 Cast iron, iron and steel 158.502 16434.104 10118.914 162.4% 0.96% 1.57% Salt; sulphur; earths and stone; plastering materials, 25 lime and cement 145.595 2909.897 2379.016 122.3% 5.00% 6.12% 29 Organic chemical products 127.502 9845.453 16960.213 58.1% 1.30% 0.75% Wood, charcoal and articles 44 of wood 126.882 6316.942 2680.503 235.7% 2.01% 4.73% 74 Copper and copper articles 96.565 30077.554 2817.308 1067.6% 0.32% 3.43% Inorganic chemical products; organic and inorganic compounds of 28 metals 84.434 9913.739 5100.315 194.4%0.85% 1.66% Pulp of wood or of other fibrous cellulosic material; 47 paper 68.152 8298.626 1370.354 605.6%0.82% 4.97% Hides and skins (except 41 furskins) 57.874 4740.522 557.683 850.0% 1.22% 10.38% Motor vehicles, tractors, cycles, other land vehicles, 87 and parts thereof 57.563 103957.617 4584.893 2267.4% 0.06% 1.26% Coffee, tea, maté and 09 spices 44.866 11410.85 499.489 2284.5% 0.39% 8.98% Vehicles and material for roads or similar, and parts 86 thereof; mechanical devices 43.551 2799.311 276.29 1013.2% 1.56% 15.76% Plastic materials and 39 articles of these materials 34.843 17792.864 9984.763 178.2% 0.20% 0.35%

Permanent Secretariat Extra-Regional Relations 78

Exports from Latin Possible America and the coverage Caribbean Imports to of India Share

India from imports Chap. Product World with SA To India To World (A)/(B (C) exports (A)/(C) (A) (B) ) from LAC (B)/(C) Instruments; optical, photography, cinematography and 90 measurement devices 28.33 16649.894 6762.689 246.2% 0.17% 0.42% 88 Aerial or spatial navigation 26.817 6743.629 2566.73 262.7% 0.40% 1.04% Wool and animal hair, fine or coarse; yarns and fabrics 51 of horsehair 25.513 751.963 378.178 198.8% 3.39% 6.75% Materials not specified 99 elsewhere 23.533 7327.345 11073.049 66.2% 0.32% 0.21% 30 Pharmaceutical products 22.616 6786.288 1667.836 406.9% 0.33% 1.36% Tanning and dyeing extracts; tannins and their 32 derivatives; paints 19.26 1792.613 1517.464 118.1% 1.07% 1.27% Essential oils and resinoids; perfumes, toilet 33 preparations 19.19 5224.994 580.329 900.4% 0.37% 3.31% Edible nuts; Peel of citrus 08 fruits or melons 18.003 20195.999 2162.313 934.0% 0.09% 0.83% Beverages, spirits and 22 vinegar 17.108 10382.685 394.104 2634.5% 0.16% 4.34% 38 Other chemical products 16.54 5336.253 3843.405 138.8% 0.31% 0.43% Rubber and rubber 40 products 16.436 6376.87 3471.182 183.7% 0.26% 0.47% Maritime or fluvial 89 navigation 16.076 11162.775 7004.947 159.4% 0.14% 0.23% Aluminium and aluminium 76 articles 15.374 3959.21 3177.639 124.6% 0.39% 0.48% 10 Cereals 13.254 18492.528 20.445 90450.1% 0.07% 64.83% Articles of cast iron, iron or 73 steel 11.519 10062.951 3752.243 268.2% 0.11% 0.31% 79 Zinc and zinc articles 11.286 1191.393 300.476 396.5% 0.95% 3.76% Legumes and vegetables, edible plants, roots and 07 tubers 10.833 7793.111 2305.34 338.0% 0.14% 0.47% Other base metals; cermets; manufactures of these 81 materials 8.343 466.376 283.284 164.6% 1.79% 2.95% Gums, resins and other 13 vegetable saps and extracts 6.942 378.791 163.142 232.2% 1.83% 4.26% Articles of stone, plaster, cement, asbestos, mica or 68 similar materials 6.715 2181.276 512.442 425.7% 0.31% 1.31% 78 Lead and lead articles 5.854 572.198 536.535 106.6% 1.02% 1.09% 23 Waste, waste from food 5.119 23427.732 285.689 8200.4% 0.02% 1.79% Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 79

Exports from Latin Possible America and the coverage Caribbean Imports to of India Share

India from imports Chap. Product World with SA To India To World (A)/(B (C) exports (A)/(C) (A) (B) ) from LAC (B)/(C) industries; food for animals 75 Nickel and nickel articles 4.947 675.209 1056.17 63.9% 0.73% 0.47% Miscellaneous manufactured articles of 83 base metals 4.636 3258.613 643.368 506.5% 0.14% 0.72% Furniture; surgical medical furniture; articles of 94 bedding and similar 4.148 9741.444 1147.717 848.8% 0.04% 0.36% 70 Glass and glass articles 3.993 2475.817 744.697 332.5%0.16% 0.54% 52 Cotton 3.751 2461.084 755.74 325.7% 0.15% 0.50% 80 Tin and tin articles 3.676 1197.924 242.291 494.4% 0.31% 1.52% 21 Various food preparations 3.674 4288.419 119.895 3576.8% 0.09% 3.06% Oil seeds and oleaginous fruits; various seeds and 12 fruits 3.198 33663.32 333.961 10080.0% 0.01% 0.96% Soap, organic surface- active agents, preparations 34 to wash, etc. 3.061 2209.925 555.44 397.9% 0.14% 0.55% Tools, kitchen articles, 82 cutlery, base metal cutlery 2.941 1961.945 945.845 207.4% 0.15% 0.31% Preparations of legumes, vegetables, fruit or other 20 parts of plants 2.878 7353.074 75.074 9794.4% 0.04% 3.83% Footwear, legwarmers, boots and similar articles 64 and parts thereof 2.849 2794.355 408.439 684.2% 0.10% 0.70% Manufactured leather articles; garnish, saddlery, 42 and travel articles 2.826 664.68 276.751 240.2% 0.43% 1.02% Tobacco and manufactured 24 tobacco substitutes 2.554 5510.888 39.207 14055.9% 0.05% 6.51% Other made-up textile 63 articles; assorted sets 2.505 1578.836 388.397 406.5%0.16% 0.64% Discontinuous man-made 55 staple fibres 2.384 559.609 626.774 89.3% 0.43% 0.38% 18 Cocoa and its preparations 1.866 2119.783 154.879 1368.7% 0.09% 1.20% Paper, cardboard; articles of pulp, paper and 48 cardboard pulp 1.612 5757.736 2376.762 242.3% 0.03% 0.07% Albuminoid substances; modified starch or starch- 35 based products 1.587 1208.154 311.068 388.4% 0.13% 0.51% Impregnated, coated, covered or laminated 59 fabrics 1.282 464.47 750.992 61.8% 0.28% 0.17%

Permanent Secretariat Extra-Regional Relations 80

Exports from Latin Possible America and the coverage Caribbean Imports to of India Share

India from imports Chap. Product World with SA To India To World (A)/(B (C) exports (A)/(C) (A) (B) ) from LAC (B)/(C) Fur, fur garments; factitious 43 or artificial fur 1.091 116.508 4.953 2352.3% 0.94% 22.03% Synthetic or artificial 54 filaments 1.038 726.519785.496 92.5% 0.14% 0.13% Apparel and clothing accessories, excluding 62 knitted fabrics 0.918 5403.409 257.997 2094.4% 0.02% 0.36% Wadding, felt, non-wovens; 56 special yarns; twines, etc. 0.884 702.358 185.584 378.5% 0.13% 0.48% 69 Ceramic products 0.876 2047.457 637.264 321.3% 0.04% 0.14% 31 Fertilizers 0.873 2822.091 5958.024 47.4% 0.03% 0.01% Other vegetable textile fibres; yarns and fabrics of 53 paper 0.641 61.462 274.934 22.4% 1.04% 0.23% 60 Knitted fabrics 0.593 480.796 380.409 126.4% 0.12% 0.16% Fish and crustaceans, molluscs and other aquatic 03 invertebrates 0.584 11558.509 46.444 24887.0% 0.01% 1.26% 50 Silk 0.401 36.647 235.751 15.5% 1.09% 0.17% Toys, games, items for entertainment or for sports; 95 parts 0.33 1678.298504.944 332.4% 0.02% 0.07% Live plants and floricultural 06 products 0.302 2602.971 17.939 14510.1% 0.01% 1.68% Plaiting materials, other products of plant origin, not specified in other 14 chapters 0.287 105.982 13.012 814.5% 0.27% 2.21%

Editorial products, for the press and for other 49 graphics industries 0.282 900.834 578.566 155.7% 0.03% 0.05% Miscellaneous 96 manufactured articles 0.149 2120.937 402.418 527.0% 0.01% 0.04% Preparations of cereals, flour, starch, starch or milk; 19 pastry 0.129 3246.294 38.529 8425.6% 0.00% 0.33% Other products of animal origin, not included in 05 other chapters 0.107 960.977 32.176 2986.6% 0.01% 0.33% Milk and dairy products; 04 bird eggs; natural honey 0.103 3836.94 36.909 10395.7% 0.00% 0.28% 1064389.2 02 Meat and edible meat offal 0.093 22043.5 2.071 % 0.00% 4.49% 61 Apparel and clothing 0.091 7989.266 158.698 5034.3% 0.00% 0.06% Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 81

Exports from Latin Possible America and the coverage Caribbean Imports to of India Share

India from imports Chap. Product World with SA To India To World (A)/(B (C) exports (A)/(C) (A) (B) ) from LAC (B)/(C) accessories, knitted Carpets and other soil coverings made of textile 57 materials 0.056 79.87 74.577 107.1%0.07% 0.08% 01 Live animals 0.043 1721.538 11.337 15185.1% 0.00% 0.38% Photographic or 37 cinematographic products 0.025 303.257 260.819 116.3% 0.01% 0.01% 65 Headgear and parts thereof 0.022 149.348 12.92 1155.9% 0.01% 0.17% Special woven fabrics; 58 tufted textile surfaces; lace 0.022 272.387 158.237 172.1% 0.01% 0.01% 45 Cork and articles of cork 0.002 15.513 5.441 285.1% 0.01% 0.04% Preparations of meat, of fish or of crustaceans and 16 molluscs 0 4189.724 3.961 105774.4% 0.00% 0.00% Milled products; malt; starch and starch; inulin; 11 wheat gluten 0 1303.115 49.941 2609.3% 0.00% 0.00% Gunpowder and explosives; pyrotechnic articles; 36 matches 0 278.582 13.692 2034.6% 0.00% 0.00% Pieces of art, collectible 97 items or antiques 0 425.487 50.038 850.3% 0.00% 0.00% Manufactures of plaiting 46 materials basketware 0 25.146 2.971 846.4% 0.00% 0.00% Weapons and ammunition and parts thereof and 93 accessories 0 444.002 53.888 823.9% 0.00% 0.00% Musical instruments; parts and accessories of these 92 instruments 0 92.594 29.6 312.8% 0.00% 0.00% Feathers, feather articles; 67 artificial flowers 0 14.872 12.352 120.4% 0.00% 0.00% 91 Watchmaking 0 184.317 309.744 59.5% 0.00% 0.00% Umbrella, sun umbrellas, 66 seats, sticks, whips 0 6.353 22.299 28.5% 0.00% 0.00% Materials specified only at 98 the chapter level 0 0 0 0.0% 0.00% 0.00%

All products 14126.6 1018812.83 466045.567 218.6% 1.39% 3.03% Source: Prepared by the author with data from the International Trade Centre, Trade Map (2014B).

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 83

ANNEX VII

POSITION OF LATIN AMERICA AND THE CARIBBEAN BY NUMBER OF SUBSIDIARIES AND BY SECTORS, AS DEVELOPING COUNTRIES RECEIVING INVESTMENTS FROM INDIA

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 85

Number No. of Number of of Indian Sector Position* LAC country subsi- Recent** reported Employees parent diaries employees firms Agriculture, Total sector 6 10 1 30 livestock and 1 5 9 hunting Brazil Fishing and Total sector : 2 2 forestry 1 Brazil 2 2 Total sector : 18 18 8 7 343 Mining and 2 Brazil 5 5 quarrying 3 Bolivia 1 1 1 Manufacture Total sector : 12 12 2 2 1,020 of food and beverage 1 8 8 products Brazil Total sector : 26 37 11 19 11,563 Manufacture 1 Brazil 12 18 2 2 1,018 of textiles and leather 4 Mexico 3 3 1 3 810 8 Chile 1 1 1 1 200 Production of Total sector : 13 13 3 9 1,144 wood and 1 Brazil 2 2 manufacture of wood 9 1 1 1 195 products Honduras Publishing and Total sector : 7 13 1 4 3,750 printing activities and 1 2 8 reproduction of recordings Brazil Total sector : 38 69 28 43 8,659 Manufacture 2 Brazil 7 10 7 6 1,009 of chemical 6 Mexico 4 4 3 3 610 products and substances 15 Peru 1 1 1 1 8 30 Chile 1 1 1 1 400 Manufacture Total sector : 13 18 9 12 5,100 of rubber and 2 Brazil 3 5 2 3 3,726 plastic 3 Mexico 2 2 1 2 690 products 7 Chile 1 1 1 1 200 Manufacture Total sector : 8 11 3 6 799 of non- 1 Brazil 4 5 1 metallic mineral 3 1 1 1 289 products Mexico Base metals Total sector : 36 67 21 34 12,299 and metal 1 10 28 3 4 3,119 products Brazil Manufacture Total sector : 29 35 20 27 9,398 of machinery 1 Brazil 5 5 2 3 246 and equipment 6 Mexico 3 3 3 2 125 Manufacture Total sector : 33 64 25 38 14,462

Permanent Secretariat Extra-Regional Relations 86

Number No. of Number of of Indian Sector Position* LAC country subsi- Recent** reported Employees parent diaries employees firms of electronic 1 Brazil 9 27 6 7 1,810 equipment 2 Mexico 8 8 4 6 4,115 10 Colombia 1 1 11 Costa Rica 1 1 1 550 12 Chile 1 1 1 1 200 Manufacture Total sector : 12 16 5 8 1,772 of precision 1 5 8 equipment Brazil

Manufacture Total sector : 24 33 19 25 10,780 of vehicles, 1 Brazil 5 7 3 4 1,258 trailers and 2 Mexico 5 5 4 4 815 semi-trailers 12 Chile 1 1 1 1 200 Manufacture Total sector : 20 38 5 11 698 of furniture 1 Brazil 8 26 1 and 4 Mexico 1 1 1 120 manufacturing industries 8 Peru 1 1 1 1 22 Total sector : 36 42 14 23 4,177 Construction 1 Brazil 9 10 12 Mexico 1 1 1 1 340 Total sector : 311 465 113 186 19,422 1 Brazil 120 189 7 13 871 9 Mexico 8 8 2 8 313 27 Uruguay 1 1 28 Venezuela 1 1 1 Wholesale and 42 Panama 1 1 retail trade 45 Argentina 1 1 1 4 47 Colombia 1 1 1 1 30 Dominican 51 1 1 Republic 52 Ecuador 1 1 1 15 53 Barbados 1 1 1 17 Hotels and Total sector : 16 22 1 3 404 restaurants 1 Brazil 11 16 Total sector : 92 161 25 39 7,506 Transport, 1 Brazil 36 68 1 2 502 storage and 17 Paraguay 1 1 communica- tions 20 Bermuda 1 1 1 1 2 26 Mexico 1 1 1 35 Total sector : 38 58 9 18 1,771 Financial 4 Brazil 3 3 intermediation Trinidad & 13 1 1 1 30 Tobago Business, real Total sector : 166 272 83 115 41,993 estate and 1 Brazil 49 62 8 9 1,321 rental activities 8 Mexico 8 8 5 5 3,218 Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 87

Number No. of Number of of Indian Sector Position* LAC country subsi- Recent** reported Employees parent diaries employees firms 15 Bermudas 3 7 4 1 234 17 Chile 3 3 3 1 1,257 21 Uruguay 2 3 3 2 60 37 Bahamas 1 1 38 Argentina 1 1 1 305 Cayman 39 1 1 1 1 3 Islands Public Total sector : 8 11 2 180 administration 1 6 8 and defence Brazil Total sector : 3 3 1 Teaching 1 Brazil 2 2 Social and Total sector : 19 21 4 2 88 health services 1 Brazil 13 14 5 Mexico 1 1 1 1 38 Other Total sector : 52 150 5 6 584 community, social and personal 1 30 124 service activities Brazil Total sector : 88 126 15 29 7,628 Other service 1 Brazil 27 36 2 502 activities 14 Mexico 1 1 1 40 Total number of Indian companies in 478 790 90 115 30,872 Latin America and the Caribbean Total number of Indian companies in 669 1288 525 331 131,317 developing countries * Position by number of subsidiaries in the sector. ** Established since 2000 onwards. Source: Prepared by the author with data from the International Trade Centre, Investment Map (2014).

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 89

ANNEX VIII

POSITION OF LATIN AMERICAN AND CARIBBEAN COUNTRIES BY SECTORS AND BY NUMBER OF SUBSIDIARIES IN INDIA

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 91

Number of LAC No. of Number of LAC Sector Position* parent subsi- Recent** reported Employees country firms in diaries employees India Total sector : 628 1,077 252 363 302,999 15 Bermudas 7 7 1 3 1,035 UK Virgin 21 5 6 1 4 720 Islands Business, real Cayman estate and rental 26 2 3 1 3 1,410 Islands activities 35 Bahamas 1 1 36 Brazil 1 1 Netherlands 38 11 1 Antilles Production of Total sector : 42 44 12 14 3,220 wood and wood products 15 11 manufacturing Bermudas Publishing and Total sector : 45 68 7 27 7,109 printing activities and reproduction 12 11 of recordings Bermudas Fuel production Total sector : 75 121 18 27 6,229 and crude oil Cayman 7 25 refining Islands Manufacture of Total sector : 195 445 76 123 99,775 chemical products Cayman 22 11 1 and substances Islands Manufacture of Total sector : 89 132 42 37 8,651 rubber and plastic 5 26 1 products Bermudas Total sector : 78 122 23 38 24,923 Manufacture of 8 Bermudas 1 5 1 non-metallic Cayman 13 11 1 mineral products Islands 17 Mexico 1 1 Total sector : 228 326 83 97 27,909 Cayman 12 3 7 1 2 1,755 Base metals and Islands metal products 13 Bermudas 2 6 1 UK Virgin 15 14 Islands Total sector : 362 705 169 203 172,052 12 Bermudas 3 12 1 2 1,055 Manufacture of UK Virgin 19 25 machinery and Islands equipment Cayman 27 1 1 1 1 55 Islands 30 Mexico 1 1 1 1 22 Manufacture of Total sector : 326 611 133 190 166,720 electronic 14 2 5 1 1 3,000 UK Virgin

Permanent Secretariat Extra-Regional Relations 92

Number of LAC No. of Number of LAC Sector Position* parent subsi- Recent** reported Employees country firms in diaries employees India equipment Islands 17 Bermudas 2 4 1 55 22 Mexico 2 2 1 1 22 27 Brazil 1 1 1 Cayman 28 11 Islands Total sector : 129 220 43 76 34,706 Manufacture of 10 Bermudas 1 5 1 precision UK Virgin equipment 19 1 1 1 1 3,000 Islands Total sector : 229 394 122 116 113,509 9 Bermudas 4 8 1 2 1,055 Manufacture of UK Virgin 14 3 5 1 1 3,000 vehicles, trailers Islands and semi-trailers Netherlands 25 11 Antilles 29 Mexico 1 1 1 1 22 Manufacture of Total sector : 116 150 39 60 25,329 furniture and 7 Bermudas 1 5 1 manufacturing Cayman 14 22 21 55 industries Islands Total sector : 75 87 20 33 22,926 Cayman 21 11 Construction Islands UK Virgin 24 11 1 Islands Total sector : 510 747 152 226 57,161 15 Bermudas 4 7 1 Cayman Wholesale and 19 4 4 3 1 110 Islands retail trade 22 Brazil 2 3 2 2,005 UK Virgin 25 33 1 Islands Total sector : 259 514 85 127 79,649 Cayman 12 48 31 50 Islands Transport, storage 14 Bermudas 3 6 1 and UK Virgin communications 20 34 Islands Netherlands 30 11 Antilles Total sector : 27 31 9 10 1,741 Social and health UK Virgin services 7 2 2 1 1 350 Islands Other community, Total sector : 37 43 9 11 3,282 social and 7 11 personal service UK Virgin Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 93

Number of LAC No. of Number of LAC Sector Position* parent subsi- Recent** reported Employees country firms in diaries employees India activities Islands Total sector : 160 253 39 63 26,133 6 Bermudas 6 9 1 1 28 Other service Cayman 11 33 2 activities Islands UK Virgin 23 11 Islands Total number of Latin American and 101 171 38 18,804 Caribbean companies in India 31 Total number of foreign companies in 1,933 4,633 945 965,190 India 1,385 * Position by number of subsidiaries in the sector. ** Established since 2000 onwards. Source: Prepared by the author with data from the International Trade Centre, Investment Map (2014).

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 95

ACRONYMS

ALADI – Latin American Integration Association ARPPI – Agreement on Reciprocal Promotion and Protection of Investments BJP – Bharatiya Janata Party BRIC – Brazil, Russia, India and China BRICS – Brazil, Russia, India, China and South Africa CACM – Central American Common Market CAN – Andean Community CELAC – Community of Latin American and Caribbean States COP – Conference of the Parties of the UN Framework Convention on Climate Change EU – European Union FTA – Free Trade Agreement GCI – Global Competitiveness Index of the World Economic Forum GDP – Gross Domestic Product GSTP – Global System of Trade Preferences HDI – Human Development Index IBSA – Trilateral Cooperation Forum grouping India, Brazil and South Africa ICT – Information and Communication Technologies IMCO – Mexican Institute for Competitiveness IMF – International Monetary Fund ITC – International Trade Centre LAC – Latin America and the Caribbean MERCOSUR – Southern Cone Common Market MFN – Most Favoured Nation tariff NAMA– Non-Agricultural Market Access OECD – Organization for Economic Cooperation and Development PPP – Purchasing Power Parity SACU – Southern African Custom Union SELA – Latin American and Caribbean Economic System SMEs – Small and Medium-sized Enterprises UN – United Nations UNDP – United Nations Development Programme USSR – Union of Soviet Socialist Republics WB – World Bank WEF – World Economic Forum WTO – World Trade Organization

Relations of Latin America and the Caribbean with India: SP/RRRECALCPIA/DT N° 2-14 A window of opportunity 97

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