India’s rocky path in Latin America

Why should India even try to emulate China’s pace of growth in the LAC or even at least open more embassies and conduct high-level visits? Other than the sheer market potential of the LAC, as the LAC senior official said to me wryly, “If you want to be a global power, you need to display your policy around the world.”
Why should India even try to emulate China’s pace of growth in the LAC or even at least open more embassies and conduct high-level visits? Other than the sheer market potential of the LAC, as the LAC senior official said to me wryly, “If you want to be a global power, you need to display your policy around the world.” (Amal KS/HT Archive) PREMIUM
Why should India even try to emulate China’s pace of growth in the LAC or even at least open more embassies and conduct high-level visits? Other than the sheer market potential of the LAC, as the LAC senior official said to me wryly, “If you want to be a global power, you need to display your policy around the world.” (Amal KS/HT Archive)
Updated on Nov 02, 2021 07:49 AM IST
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ByManjari Chatterjee Miller

It’s time to talk about India’s foreign policy in Latin America. Or, as some Latin America-based experts complain, India’s lack of foreign policy on Latin America. Despite growing trade and investments in some sectors since the 2000s, India and Latin American countries (LAC) not only do not have the close diplomatic and cultural ties that foster deeper economic partnerships, but India seems to have little interest in developing them.

India’s lack of interest in LAC dates back many decades. In the 1960s, the ministry of external affairs (MEA) produced a report declaring that, despite many overtures from LAC, India had not responded in any meaningful way — the report called Indian policy in the region “shortsighted in the extreme”. Despite this scathing feedback, India did not make any changes in its policies. Even well into the 1990s, as one author observed there were few Indian diplomats who specialised in the region, and those who did were aware that they “were confining their career to the backwaters”.

This state of affairs showed some signs of change for the first decade of the 2000s. India’s liberalisation and shift from protectionist policies coincided with the view in Latin America that there were not one, but two rising Asian giants, and LAC would benefit from cultivating relationships with both. Consequently, there was a flurry of diplomatic and economic activity.

Embassies were opened, and visits by LAC heads increased considerably. India signed two preferential trade agreements (PTAs) with MERCOSUR (Argentina, Paraguay, Brazil and Uruguay) in 2004, and with Chile in 2006. Indian private sector companies began establishing a presence in the region, particularly in pharmaceuticals and IT services. Indian pharma was successful in building manufacturing plants, including in Brazil and Mexico, cornering the market in supplying oncology products, HIV drugs, and vaccines, and generic drugs. IT was also a success story. Tata Consulting Services (TCS) went from establishing a centre in 2002 in Uruguay to acquiring offices all over the region, and training thousands of professionals.

In some ways, those changes paid off. As former Indian ambassador to four countries in the continent, Rengraj Viswanathan, told me in a conversation, “Today, India is the fifth largest supplier of pharmaceuticals to the region, surpassing even China.” In 2018, TCS was named Latin American company of the year. Today, India’s volume of trade with LAC stands at almost $13 billion.

But, as Viswanathan put it diplomatically, “The glass is half full.” A former senior official from a prominent LAC, with experience in Asia, was considerably more blunt in his remarks to me, “In hindsight, those (2003-2010) were the golden years of the relationship.” Despite the keen interest of LAC to “not put all their eggs in one basket” (read: not overly depend on China), India did not deliver. Other than pharma and IT, trade numbers remained low.

But even more to the dismay of LAC officials, Indian politicians and bureaucrats made little effort to develop close diplomatic and cultural ties that could in turn deepen the economic relationship. The same Latin American former official, quoted above, added that he had great hopes of PM Modi, but they faded. “I was told Indian PMs have to run coalition governments so they cannot undertake too many visits abroad. Modi doesn’t have that problem, and he travels to many countries. Even when he attended the (2018) G20 summit in Buenos Aires, many ambassadors (from neighboring countries) tried to get him to visit but instead he went to just Suriname. People want to see visits from PMs, cabinet ministers. That develops a working relationship. If Modi doesn’t visit, LAC presidents say, why should we?”

The official has a point. Other than travelling to Argentina and Brazil because of the G20 and (2014) BRICS summits, Modi has visited Mexico on the last leg of a five-nation tour in 2017. That visit to Mexico was the first by an Indian PM since 1986. No Indian PM has visited Chile since 1968, when Indira Gandhi did so.

External affairs minister S Jaishankar’s recent visit to Mexico was a good step, but it isn’t enough. To add to this, India has embassies in only 14 of the countries in the continent — not only are there no embassies in Uruguay, Ecuador, Bolivia, Honduras and Nicaragua, but, I am told, Costa Rica does not even have an honorary-consul in the country, let alone a consulate or embassy.

In contrast, China’s investments and trade in the region not only grew almost 20-fold during the same period — standing at $300 billion today and expected to grow to $700 billion by 2035 — but till just a couple of years ago, its volume of trade with Chile alone was greater than the volume of India’s trade with all of Latin America. Chinese leaders, including Xi Jinping and Li Keqiang, make regular visits to the region and set up multilateral entities — the China-Latin America Ministerial Forum meets every three years. China has joined the Inter-American Development Bank. There are at least 60 LAC study centres in China — there are none in India.

Why should India even try to emulate China’s pace of growth in the LAC or even at least open more embassies and conduct high-level visits? Other than the sheer market potential of the LAC, as the LAC senior official said to me wryly, “If you want to be a global power, you need to display your policy around the world.”

Manjari Chatterjee Miller is a senior fellow at the Council of Foreign Relations, and research associate at the University of Oxford. She is on leave from the Pardee School where she is associate professor. The views expressed are personal

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Thursday, December 09, 2021