New Delhi: India is intensifying its engagement with Latin America and the Caribbean (LAC) region, emphasising economic partnerships, energy security, and digital transformation as key areas of cooperation.
Speaking at the 10th Raisina Dialogue here Wednesday, Minister of State for External Affairs Pabitra Margherita reaffirmed India’s commitment to fostering deeper ties with the region as part of its broader Global South outreach.
"The LAC region holds a pivotal place in India’s global strategy," Margherita stated. “We share common aspirations and a commitment to a multipolar world order that truly represents the needs of developing nations."
His remarks underscored a growing convergence of interests between India and LAC in trade, technology, and sustainable development. India’s economic engagement with LAC has grown substantially, with bilateral trade reaching $35.73 billion in the financial year 2023-24. Margherita highlighted the complementarity between the two economies, particularly in sectors such as agriculture, energy, pharmaceuticals, and digital finance.
"There is an interest in expanding the scope of the Preferential Trade Agreement between India and MERCOSUR," he stated. "India is the fifth-largest trading partner of Brazil and Argentina. In the first-ever acquisition of lithium resources abroad, India signed an agreement with Argentina to lease five lithium blocks for exploration, and eventual extraction."
The Southern Common Market (commonly known by the abbreviation MERCOSUR in Spanish and MERCOSUL in Portuguese) is a South American trade bloc established by the Treaty of Asuncion in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina, Bolivia, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since December 2016. Chile, Colombia, Ecuador, Guyana, Panama, Peru, and Suriname are associate countries.
Margherita also stressed on the importance of energy cooperation between India and the LAC countries. "Latin America with its rich reserves of oil, natural gas and minerals can advance India’s goal of energy security and diversification," he said. "Our cooperation in biofuels and ethanol production is opening new pathways for sustainable energy solutions."
The Minister also highlighted how LAC nations have joined India-led global initiatives, such as the International Solar Alliance (ISA), the Coalition for Disaster Resilient Infrastructure (CDRI) and the Global Biofuel Alliance (GBA).
India’s digital transformation strategy also presents an opportunity for deeper integration. The region has already begun embracing Indian fintech innovations, Margherita highlighted, with Trinidad and Tobago becoming the first Caribbean Community (CARICOM) country to adopt the Unified Payments Interface (UPI). Similar initiatives are underway in Guyana, Peru, Uruguay, and Jamaica, strengthening financial inclusion and cross-border transactions.
Beyond trade and investment, India’s development assistance programmes have gained momentum across the region. Margherita detailed several key projects such as the $23.37-million line of credit to Guyana for supplying two aircraft, power transmission infrastructure in Nicaragua set for completion by 2026, and funding for small and medium enterprises (SMEs) in Suriname, the Dominican Republic, Trinidad and Tobago, and St Kitts and Nevis, supporting economic diversification.
"We in India believe that in order to build an inclusive and just order, it is imperative to forge strong partnerships with the developing world,” Margherita said ahead of a Raisina Dialogue panel discussion on ‘Destiny or Destination: Culture, Connectivity and Tourism’. “So naturally, countries of Latin America and the Caribbean (LAC) occupy a very significant position in our global outreach efforts. We share similar aspirations, and support a multipolar world order that caters to the needs of the Global South."
Earlier in the day, Margherita also addressed the 10th India-LAC Conclave organised by the Confederation of Indian Industry (CII) wherein he outlined a roadmap for a mutually beneficial economic alliance, reaffirming India's commitment to the region as a key partner in the Global South.
"Despite the physical distance, the commitment of LAC nations to strengthening ties with India is evident," Margherita stated, referencing his recent visit to Uruguay, the Bahamas, Barbados, and Nicaragua. The minister emphasised that India’s engagement with LAC, which has grown significantly under Prime Minister Narendra Modi’s leadership, is poised to reach unprecedented levels in trade, technology, and diplomatic outreach.
At the Second India-CARICOM Summit held in Georgetown, Guyana, last year, PM Modi outlined seven key areas of collaboration: capacity building; agriculture and food security; renewable energy and climate change; innovation, technology and trade; cricket and cultural exchanges; ocean economy and maritime security; and healthcare and pharmaceuticals.
These priorities, Margherita stressed, extend beyond CARICOM and serve as a strategic blueprint for a broader India-LAC engagement. India and LAC have set an ambitious $100-billion bilateral trade goal by 2027-28, a significant leap from the current $50 billion. However, global economic volatility and rising protectionist policies pose challenges.
“We need to forge agreements to enhance trade and investment for mutual growth,” Margherita asserted, underlining the need to diversify supply chains after the COVID-19 pandemic. Monday has been a day of focus on India’s ties with the LAC region. There are reasons more than one as to why New Delhi is engaging with the LAC region.
“Leave aside the Caribbean nations where there is a significant Indian diaspora, it is the growing interaction of India with Latin American countries in recent times that is important,” Ash Narain Roy, Director of the New Delhi-based Institute of Social Sciences (ISS), told ETV Bharat. “But it has not reached nowhere the potential it holds.”
Roy explained that China has made major inroads in Latin America through its Belt and Road Initiative (BRI) investments and President Xi Jinping making standalone bilateral visits to countries of the region.
“So, China is a different player altogether in that region,” he said. “But India has realised that it is being seen as a benevolent power in that region. New Delhi has done a lot of groundwork. Now, there is a better frequency of bilateral visits.”
Roy is of the view that there should be standalone bilateral visits at the prime ministerial level from India to the countries of that region. “Our Prime Minister can go on bilateral visits to a group of countries in that region in one tour,” he said. “The LAC likes India as a counter-balancing factor. What is happening is fine. But we need a big push.”
Roy further explained that India should not have an overall common foreign policy for South America but rather a combination of regional policies.
“India is trying to catch up with other countries in terms of engaging with the LAC region,” Saurabh Mishra, Research Fellow at the Manohar Parrikar Institute of Defence Studies and Analyses, told ETV Bharat. “India has its own vital interests of securing supply lines.”
Mishra also pointed out that with India aiming to boost its manufacturing sector, it wants to maintain the resources available in the LAC region.
“The relationship is being developed with a futuristic eye rather than seeking immediate dividends,” he said. “It is expected that India will give sustained momentum to this relationship from now onwards.”
