Exim
Bank study shows Latin America's business potential
Our Corporate
Bureau
9 February 2005
Exim
Bank's study, Business with Latin America, shows that Brazil and
Mexico have emerged as the region's largest markets, accounting for over
60 per cent ($541 billion) of Latin America's total trade ($858) Mexico
has also replaced Japan as the USA's second-largest trading partner. The
study, which shows that the region offers enormous business potential for
India, was recently released by minister of state for external affairs Rao
Inderjit Singh, in New Delhi. It is authored by the joint secretary, ministry
of external affairs (Latin American and Caribbean region), R Viswanathan.
The study outlines the region's increasing stability and prosperity. The
shift towards a floating exchange rate regime in most of the countries in
the region ensures the timely adjustment of the exchange rate during crises,
and makes the exchange rate competitive.
The
study shows that Brazil and Mexico, the biggest markets in the area, offer
different platforms for entry into the region, and offer enormous business
potential. Chile is another important market for Indian business as it is
the most transparent and well-managed market in the region. The study suggests
that Indian exporters should also target Mercosur, Andean, Central American
and Caribbean countries for investment and joint ventures in areas like
petroleum, mining, chemicals and information technology.
The study concludes that growing free trade arrangements would benefit India,
by reinforcing the strength and growth of the individual countries of the
region, making them bigger and stronger markets for Indian products. Integration
would reduce the marketing efforts of Indian firms, as they could adopt
a common approach for the region as a whole, the study observed.
Regional
integration continues to be an important driving force in Latin America.
All countries except Cuba are part of one or more regional blocs, or have
signed free trade agreements. Economic integration would be followed by
integration of physical infrastructure including transportation, telecom
and energy in the whole of southern America under the 'Puebla-Panama' Plan,
the study postulates.
The
study points out that Latin America's potential is yet to be fully tapped
by Indian exporters, and it is necessary to make them aware about the region.
Exim Bank brings out a quarterly bilingual (English and Spanish) publication
titled Indo-LAC Business to help promote awareness of the trade potential
in Latin America. It has also extended lines of credit to financial institutions
in the LAC region, covering 15 countries and involving credit amounts of
$103 million, to support exports of Indian equipment, goods and technology.
The 
'Focus
LAC' programme of the Government of India and Exim Bank's lines of credit
initiatives would work in tandem to tap the business potential of the region.
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