Suresh Prabhu addresses diplomats of LAC Region
While interacting with diplomats of India-Latin America ...
While interacting with diplomats of India-Latin America and Caribbean Strategic (LAC) Economic Cooperation in New Delhi in February, Union Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, stressed on the need for a multi-pronged strategy to enhance India’s bilateral trade, both in merchandise and services. He said that establishing value chain linkages will help to boost trade relations between LAC-India. Patterns of trade have changed dramatically over the past few decades, and business activities at different stages of value addition are now located in different countries, based on where they are most efficiently produced. Any strategy for enhancing bilateral trade between LAC-India will therefore critically hinge on the scope for value chain integrations in various manufacturing and services segments.
Several countries in the LAC region are agriculture powerhouses with large exportable surpluses. In fact, the region is often referred as another global breadbasket. The Global Harvest Initiative estimates that if the region maintains a Total Factor Productivity growth rate of 2.67 percent per year, food demand within the region can be met and exceeded by 2030, enabling it to vastly increase its contributions to global agricultural markets. The Commerce Minister said that Indian companies could form joint venture projects for cultivation of lentils, oil-seeds and food grains, which are crucial import items for India, providing win-win opportunities for our regions. Indian companies could also invest in in-situ storage to reduce produce-wastage. India could also share best practices and conduct joint research in sectors such as dairy farming, seeds and pulses.
Suresh Prabhu informed that owing to its competitive advantage in the sector, pharmaceutical products have also emerged as one of India’s main exports to LAC, accounting for nearly 3.3 percent of the region’s imports.
The LAC region comprises of 43 countries and the most important economic and trading partners of India are Brazil, Argentina, Peru, Chile, Colombia, Ecuador, Guatemala, Venezuela, Panama and Cuba.
The bilateral trade during 2017-18 was USD 29.33 billion, with exports at USD 8.61 billion and imports at USD 20.72 billion. Bilateral trade between India-LAC was USD 38.48 billion (2014-15), USD 25.22 billion (2015-16), USD 24.52 billion (2016-17). The large variation was due to petroleum crude prices.
The Commerce Minister said with the strength and capability in the Information Technology sector, Indian IT firms are also establishing business partnerships in LAC countries. The region has a huge pool of multi-lingual, cost-effective professionals which Indian companies are leveraging for a near-shore business model.