India and Latin America

Understanding the Relationship

Latin America and the Caribbean (often abbreviated as LAC) is one of the most promising emerging growth poles of the twenty-first century. It is a vibrant bloc of nations with a youthful population, abundant natural wealth, and, in most states, a stable democratic polity. These very features make it a natural partner for India, which shares a similar demographic profile and developmental outlook. Culturally too, India casts a deep and affectionate influence across the region — visible in the popularity of yoga, philosophy, dance, cinema and the arts. In Brazil, for instance, yoga centres dot almost every neighbourhood, and Indian films resonate strongly with local audiences.

What is striking is how the region’s perception of India has evolved. For much of the twentieth century, Latin America viewed India romantically as a “land of magic and mysticism.” Today it sees India very differently — as a rising power and an emerging market economy whose partnership carries strategic and commercial weight. Understanding how this transformation happened is the key to grasping the drivers of the relationship.

Historical Evolution: How Neglect Turned into Engagement

The trajectory of India–Latin America ties is best understood in three broad phases. Each phase reveals a lesson that still shapes policy thinking today.

The Cold War Phase — An Era of Neglect

When India became independent in 1947, its foreign policy energies were absorbed by two priorities: first, neutralising threats from its immediate neighbourhood; and second, using the philosophy of non-alignment to reconnect with regions where the British had left some footprint. Latin America fit neither priority. India had inherited no colonial-era linkages with the region, and Latin America posed no strategic threat. As a result, the region was largely neglected. Although India opened diplomatic missions across Latin America in the early 1950s, the tone remained low-key, and Prime Minister Nehru visited only a single Latin American nation — Mexico, in 1961.

Case Insight — The Price of Neglect The Kashmir vote: After the first India–Pakistan war (1948), when India took the Kashmir question to the UN Security Council, Argentina recommended that Pakistani forces be permitted in Kashmir even as demilitarisation was being negotiated. India had built no goodwill in the region to draw upon. The Goa liberation (1961): When India used military force to liberate Goa from Portugal, Brazil — sympathetic to Lisbon — sharply criticised India, marking a low point in ties. The lesson: Diplomatic absence has a cost. Neglecting distant regions can translate directly into lost votes and lost leverage on issues of core national interest, including sovereignty.

A genuine thaw began in the 1960s. The birth of the Group of 77 (G-77) and the United Nations Conference on Trade and Development (UNCTAD) gave India and Latin America a common platform. Both challenged the prevailing global development model and pushed for South–South cooperation. As the Non-Aligned Movement (NAM) reinvented itself into a vehicle for foreign-policy diversification and greater global assertiveness, Latin American states were drawn into its orbit — by 1983, fifteen states from Latin America and the Caribbean were participating in the NAM summit. Domestically too, India’s leftward tilt in the 1960s–1970s (the Garibi Hatao campaign, bank nationalisation, and the 1971 Treaty of Friendship with the USSR) fed a wave of “Third Worldism” and a demand for a New International Economic Order (NIEO), pulling the two regions closer.

Case Insight — Loss of Leverage in Ecuador (1984–85) In 1984, citing financial constraints, India closed its embassy in Quito, Ecuador. Soon after, reports emerged that an Ecuadorian delegation had met Khalistani extremists in London, and that Ecuador might recognise a Khalistani “government in exile.” The matter eventually dissipated, but with no embassy and weak ties, India could exert almost no leverage over an issue that touched its sovereignty. The episode reinforced the same lesson as the Cold War years — presence is a prerequisite for influence.

The Post-Cold War Phase — Rediscovery and Commerce

The end of the Cold War marked a decisive shift. India began attaching far greater significance to Latin America, and the private sector emerged as the primary connector. The landmark policy instrument was the FOCUS–LAC (Latin America and Caribbean) Programme, launched in 1997 to deepen the presence of Indian business in the region. Over time, Indian firms established themselves not only in hydrocarbons but also in IT, pharmaceuticals, corporate governance and consultancy.

A distinctive feature of India’s trade model set it apart from China. Where China largely exports finished goods to Latin America, India has tended to supply raw materials and intermediates, enabling the region’s own industry to manufacture and compete in global supply chains. Latin America also became a continent of hope for India’s energy security, offering a valuable alternative to a volatile West Asia.

Snapshot: The Three Phases at a Glance

Significance of Latin America for India

The importance of Latin America to India is genuinely multidimensional — economic, strategic, energy-related, technological and diplomatic. The relationship today rests on trade of considerable and growing scale: recent figures place two-way trade at roughly US $43 billion (imports of about US $23 billion and exports of about US $20 billion), with an ambitious target of US $100 billion by 2028.

Dimension	Why Latin America Matters to India
Resource security	The region is rich in copper, lithium and gold. It holds around 20% of global oil reserves and supplies a significant share of India’s crude — offering affordable resource procurement and investment avenues.
Energy security	India now sources a substantial portion of its crude imports from Brazil, Colombia, Mexico and Venezuela, diversifying away from an unstable West Asia.
The Lithium Triangle	Argentina, Bolivia and Chile together hold the world’s largest lithium reserves. This is vital for India’s clean-energy and electric-vehicle goals; India is actively exploring resource partnerships here.
Pharma & health	India exports generic medicines worth around a billion dollars to the region, sharply reducing healthcare costs for Latin American populations — a powerful goodwill driver.
IT services	India is a major provider of IT services to the region; over 35,000 Latin Americans are employed by Indian IT companies operating there.
Two-way investment	Latin American firms have invested around a billion dollars in India — in soft drinks, auto parts, multiplexes and theme parks — and have set up software development and delivery centres employing thousands of Indian engineers.
Diplomatic weight	Latin American support is valuable for India’s aspirations to permanent UNSC membership and NSG entry, and for shaping global negotiations on climate, trade and terrorism.
Global South solidarity	Shared positions in G20, BRICS and IBSA advance a common agenda of development, equity and reform of global institutions.
Strategic diversification	Engagement reduces India’s overdependence on traditional partners and expands its strategic and economic footprint in the Global South.

Areas of Cooperation

Cooperation spans four broad tracks — people-to-people, political, economic and security. Together they show how a once-distant relationship has acquired real institutional depth.

People-to-People and Cultural

• Growing ties through language, cuisine, music, scholarships and festivals.
• Yoga is a flagship instrument of India’s soft power across the region, especially in Brazil.
• Cinema and cultural exchange — including promotion of films and food — build grassroots familiarity between the two peoples.

Political and Institutional

• Engagement through BRICS, IBSA and the Pacific Alliance.
• Grants and lines of credit to CARICOM (the Caribbean Community) deepen developmental partnership.
• Regular high-level bilateral political visits sustain momentum.

Economic and Commercial

• Trade in oil, metals and pharmaceuticals forms the commercial backbone.
• The India–MERCOSUR Preferential Trade Agreement (PTA) — with the bloc of Argentina, Brazil, Paraguay and Uruguay — boosts commerce and is a base to build upon.
• Around US $1 billion of Latin American investment now flows into India across diverse sectors.

Security and Defence

• The DRDO–Embraer radar project illustrates emerging defence-technology cooperation.
• Defence ties remain low-profile yet promising, offering India strategic space in a region where China’s presence is expanding.

Issues and Challenges

Despite clear complementarities, the relationship remains below potential. The principal constraints are:

• Geographical distance and divergent priorities: The sheer physical distance, coupled with differing domestic and international priorities, has historically slowed engagement.
• Absence of cultural, linguistic and diaspora ties: Unlike other regions, India lacks a large diaspora bridge or shared language to anchor the relationship.
• Connectivity and the digital divide: Latin America’s broadband penetration is low (under half of households), with wide gaps between income groups — limiting the reach of digital cooperation.
• Financial limitations: Sluggish growth, high inflation and global uncertainty depress purchasing power across parts of the region.
• Stalled MERCOSUR FTA: Negotiations for a fuller Free Trade Agreement with MERCOSUR have stalled amid disagreements within the bloc.
• Intra-regional political rivalries: Competition for regional leadership — for example between Brazil and Argentina — complicates India’s engagement.

The Way Forward

The strategic logic is compelling; what is required is a more structured, sustained and holistic approach. Six priorities stand out:

1. Leverage political neutrality: The absence of bilateral disputes creates ample room for positive, uncontested engagement.
2. Engage holistically: Pursue both bilateral and collective/regional engagement, as India already does with Africa and Southeast Asia.
3. Build deeper understanding: Move beyond diplomat-to-diplomat contact to genuinely grasp each side’s realities and priorities.
4. Practise targeted diplomacy: Identify and prioritise the most relevant regional and sub-regional bodies (MERCOSUR, Pacific Alliance, CARICOM, CELAC).
5. Adopt a comprehensive approach: Back political ties with strong economic and social partnerships.
6. Strengthen institutional frameworks: Conclude agreements on investment protection, taxation, extradition, immigration and lines of credit.