Wednesday, January 31, 2007

Article on Latin America in Telugu portal

Here is a piece on India's business with Latin America, written by Manish Chand in He has quoted my " four stages" speech at CII and Chilean Ambassador's article besides Prime Minister's statement during visit to Brazil.

This is interesting for two reasons: first, even Telugu portal is disseminating info on latin america. Secondly, Manish Chand has an interesting approach combining culture and commerce. I have never met him or heard about him. He is a good addition to the Latin America enthusiasts in India. Welcome to the Hola Club Mr Manish Chand !

Tarun Basu, chief of India Abroad News Service has informed me that Manish is from his newsagency and that this despatch has fone to over 200 subscribers incl overseas ones

India's Tango with Latin America

There is now both magic and realism in India's relations with Latin America, the energy-rich region known for its exotic beauty, joyous love of life and world-famous authors delighting in the way history and myths intersect everyday life.

The renewed camaraderie between a continent-sized country, seen increasingly as an emerging world power, and one of the world's most resource-rich regions was on display last year when Indian Prime Minister Manmohan Singh went to Brazil last year in a first visit by an Indian head of government in nearly four decades.The romance of the Latino way of life, revolving around samba, soccer and songs dripping with sadness and sensuality, has been felt in India for some time, but in the last few years this cultural attraction has taken on the complexion of a lasting relationship in which there is much to give and take.In many ways, Manmohan Singh's "voyage of discovery" to Brazil in September last month to attend the IBSA summit of India, Brazil and South Africa brought together various strands of New Delhi's accelerated engagement with Latin America, home to a large Indian diaspora, into focus.In his speech in Brasilia, Manmohan Singh talked feelingly of a beautiful country that had "fascinated me personally" and spoke of growing "complementarities" between the two sides, separated by continental distances but culturally close in spirit, in areas as diverse as energy security, agro processing, information technology, mining, forestry, biotechnology and pharmaceuticals.Although expansion of trade and investment between the two sides - that remains much below potential with bilateral trade close to $6 billion in comparison to China-Latin America bilateral trade of $40 billion - dominated the visit, Manmohan Singh also underlined the need to forge strategic relationship with Brazil and the region.India and Brazil, the two biggest democracies and economies of Asia and Latin America, have also agreed to start a strategic dialogue and committed themselves to creating a multi-polar world order. They also plan to cooperate closely in UN Security Council reforms and in multilateral World Trade Organisation negotiations. In a sure indication of more defence cooperation between the two sides in the future, Indian Army Chief J.J. Singh also accompanied the prime minister to Brazil - the first by an Indian army chief to the region.But for prospects of emerging strategic ties to become real, India and Latin America have to first concentrate with renewed vigour on multiplying trade and business ties between them.

To tap immense two-way opportunities, the Confederation of Indian Industry (CII) plans to hold a Latin America and Caribbean (LAC) conclave on Feb 14 at New Delhi this year. The conclave, the first such event that follows on the success of a similar exercise with Africa over the last two years, will bring together LAC trade and industry ministers, businessmen, chambers of commerce and trade and industry organisations for a business meeting with their Indian counterparts.

In an address to the CII, R. Viswanathan, joint secretary in charge of the LAC division in the external affairs ministry, spoke recently about four stages in India's evolving business relationship with Latin America - a region that has recorded sustained economic growth of over four percent for the fourth consecutive year."These four stages are: barrier mindset, flirtation, romance and partnership. In this current stage Indian and Latin American business have developed a healthy respect based on their changed mindset about the new emerging profile of each other's markets," he said.He also outlined the contours of "a win-win partnership" between the two sides with India's value addition to Latin America by Indian IT, pharmaceuticals and manufacturing companies which contribute to human resource development, reduction of cost of healthcare and employment and industrialisation."India benefits from access to Latin America's oil and gas, mining and forestry and agricultural resources," he said.

Indian companies have clearly woken up to the untapped potential of doing business with Latin America and are already moving into the region with enthusiasm and confidence. Jindal Steel won the bid for the Bolivian mine El MutĂșn, one of the largest iron ore deposits in the region last year. Although the deal is yet to be finalised, the Jindal group has already committed an investment of $2.3 billion.Another biggie, the Essar Group, has also made its presence felt in the region and is building a $1.2 billion steel plant in Trinidad and Tobago. Tata Motors has started a joint venture with Marcopolo, Brazil's largest bus manufacturers, and Bajaj Auto has announced the opening of a factory in Argentina.The idea now is to set more ambitious trade targets.

Chile's ambassador to India Jorge Hein has proposed raising bilateral trade to $40 billion with the LAC region by 2008. To reach this target, he has advocated expanding trade agreements between India and LAC that will be critical in removing extant trade barriers and facilitating the flow of goods and services between the two sides."The ones signed between India and MERCOSUR (a regional trade agreement between Brazil, Argentina, Uruguay, Venezuela, and Paraguay) in 2005 and between India and Chile in 2006 are a first step in that direction (a Preferential Trade Agreement with Peru is under consideration)," he wrote in an article in an Indian newspaper last year.Heine is also all for increased participation of private companies to boost business between the two sides. "The key would seem to lie in getting into the supply chains of production and distribution that cater to the respective markets, thus making the most of their comparative advantage," he wrote.In the area of energy security, Latin America could well emerge an alternative source of energy for India, which currently imports the bulk of its oil and gas requirements from the Middle East. Venezuela has one of Latin America's largest crude oil reserves. India also supports the ethanol/biodiesel alternative fuel initiative by Brazil.As India's economy continues to grow at over eight percent and it emerges an economic powerhouse, it will need huge resources of Latin America to feed its growing economy and energy needs. And as more and more countries of Latin America industrialise and democratise, it will only expand an arc of mutual advantage and prosperity between the two sides.What is also striking is a radical transformation of India's image in the region from a poverty-stricken developing country afflicted with democratic chaos to that of a vibrant emerging power that, along with China, could hold the key to the balance of power in Asia and the world.Latin America has responded to the rise of India and China in a positive manner and has smelt new opportunities and complementarities in the economic transformation of these two Asian giants, which serve as "the world's service centre" and the world's factory respectively. This is borne by two recent studies on the subject: "Latin America and the Caribbean's Response to the Growth of China and India" by the World Bank, and "China and India and its Trade Relations with Latin America and the Caribbean: Opportunities and Challenges" by the UN's Economic Commission for Latin America and the Caribbean.In the days to come, the burgeoning economic ties are set to acquire strategic character with the Latin American countries and India cooperating more proactively on global issues like counter-terrorism, energy security, multilateral trade negotiations and the expansion of the UN Security Council.

More energy to India-Latin America ties!--By Manish Chand

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