The marginal increase is not at all bad given the fact that Argentina's global trade had decreased to 151.3 billion dollars in 2012 from 161.6 billion in 2011. Their imports reduced to 60.5 billion in 2012 from 64.6 bn in 2011. Their exports declined to 90.8 bn in 2012 from 97 bn in 2011.
The reduction in imports is mainly due to the stringent Argentine government restrictions on imports and foreign exchange. Importers are generally required to export an equivalent amount of what they import.The Import license and foreign exchange for imports are complicated/ delayed/denied arbitrarily by the authorities in a non-transparent manner. The government has taken recourse to these measures because of inadequate foreign exchange reserves to pay for imports and service the debts. The government is also doing this as part of their ideology to control the economy and business more and more.
This policy is likely to continue in 2013-14 ( till the next Presidential elections) too with minor variations.
Argentina's exports were down in 2012 due to the slow down of the economies of Brasil, China, and Europe. Exports to China had decreased by23% in 2012 from 2011.
India's trade with Argentina increased by 2.2% to 1837 million dollars in 2012 from 1774 million in 2011.
India's exports in 2012 were 573 million dollars as against 561 m in 2011. India's imports in 2012 were 1264 m while they were 1213 m in 2011.
India ranked 18th in both exports and imports in 2012 among the global trade partners of Argentina.
India's major exports in 2012 were: organic chemicals- 154 million dollars ( 27% of total exports), sound and image devices - 91 million dollars ( 16%), vehicles and parts-64 million, yarn and fabrics-45 m, garments-21 m, dyestuff- 17 m..
India's main imports in 2012 were: edible oil ( mostly soy oil)- 1111 million dollars ( 88%), minerals- 30 m, leather- 29 m, cotton- 10 m
Argentina is the main source of soy oil imports of India. The annual imports are around one billion dollars in recent years except in 2010 when it went up to 2 billion. The soy oil imports from Argentina fluctuates depending upon the international palm oil prices. However, given the ever-growing deficit of India in edible oil production, India's imports of soy oil from Argentina will increase in the long term.
Argentina, which is the third largest market of Latin America after Brasil and Mexico, used to be the third largest destination for India's exports in the past. Not any longer.. It has slipped to the sixth position in 2012. Colombia has replaced Argentina in the third rank while Peru and Chile have assumed fourth and fifth rankings.
Despite the current Argentine restrictions on imports, there is lot of scope to increase India's exports in the long term. Most of the macroeconomic fundamentals of the Argentine market are relatively strong and the economy is set on a course of sustainable growth. The Indian exporters need to keep this positive long term perspective and work harder....