Washington, July 28 (IANS) Stressing the great integration potential between India and Latin America, a new study calls for closer economic ties between the two distant partners to tap into ‘massive’ trade and investment opportunities.
The study ‘India: Latin America’s Next Big Thing?’ released Tuesday by the Inter-American Development Bank (IDB) looks into recent development and economic trends in India and their possible impact for Latin America and the Caribbean.
The study argues that India has the potential to mirror the recent economic performance of China, which has become a major market for Latin American and Caribbean exports but also poses a challenge for the region’s manufacturing sector.
‘Potential exchange of goods and services between Latin America is nothing short of extraordinary,” said IDB President Luis Alberto Moreno.
With 1.1 billion people and a scarcity of natural resources, relative to other continent-size nations, India has the potential to be a large buyer of agricultural and mineral goods, Latin America’s main exports, according to the study.
Currently, India represents just 0.8 percent of this region’s overall trade, compared with China’s 7.7 percent share.
Recent economic and political changes in both India and Latin America are creating greater opportunities for more integration, Indian Ambassador to the US, Meera Shankar said.
In the case of India, the country’s growing liberalisation and strong domestic demand has helped fuel economic growth in recent years and she expects that tariffs and other trade barriers, particularly in the agricultural sector, could gradually be reduced, she said.
‘India’s trade profile is going to change and that will provide great trade opportunities for Latin America,” she said. India’s gross domestic product is expected to grow 8.5 percent this year, up from 6.9 percent during the global financial crisis, Shankar added.
For Arvind Panagarya, professor of economics at Columbia University and one of the panelists of the seminar, India’s trade potential with Latin America depends on how fast it will grow in coming years.
The country, which is now the world’s 11th biggest economy, could become the world’s third or fourth largest if its GDP grows 10 percent in real dollar terms over the next 15 years.
(Arun Kumar can be contacted at arun.kumar@ians.in)
