By IANS,
New Delhi : Indian companies should vigorously explore Latin America, especially the MERCOSUR countries, set up joint ventures and even consider mergers and acquisitions as these South American nations are poised to become global agriculture outsourcing hubs, Minister of State for Commerce and Industry Jyotiraditya Scindia said Thursday.
“Indian technology and Latin American natural and social capital make a great fit. There is also great cultural compatibility between the people of the two regions which makes joint ventures and mergers and acquisitions sustainable business propositions,” Scindia said, inaugurating the two-day 4th CII India-Latin America and Caribbean Conclave here.
Scindia said India is a big potential market for agro-processed foods made in Latin American countries. Brazil is seemingly focused on tapping this opportunity although the logistics challenges are there to be tackled.
The MERCOSUR bloc comprises Brazil, Argentina, Uruguay and Paraguay. It has Chile and Bolivia as its associate members. It has become a successful market of about 200 million people, representing about $1 trillion of GDP and $190 billion of trade. It is the fourth largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA) and ASEAN.
India signed a preferential trade agreement (PTA) with MERCOSUR in 2004 to promote trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area.
Scindia also said India should explore opportunities in other Latin American and Caribbean (LAC) markets and broaden its export product portfolio.
“Even within the LAC region, the bulk of the Indian exports go to Brazil while several other major countries like Mexico, Argentina, Peru, Chile and Uruguay account for only a fraction of total Indian imports in the region,” he said.
India exports light engineering, pharmaceuticals and mineral products to the region, “but they do not represent the strengths and capabilities of the Indian economy in its entirety”, he said.
Compared to a meagre 0.5 percent growth in the developed markets, the emerging markets are expanding at a four percent rate.
Liliana Perez, Secretary General, Colombian foreign affairs ministry, said the Colombian government was holding talks with India on signing a double taxation avoidance agreement that would boost India-Colombia economic relations.
She also emphasised the need for a free trade agreement.