India's burgeoning domestic demand provides immense opportunity for Latin American trade, the Indian Ambassador to the US, Meera Shankar, said Tuesday.
India's growing liberalisation and a strong domestic demand has helped fuel economic growth in recent years, Shankar said at a seminar co-organised by the Inter-American Development Bank (IDB), Woodrow Wilson Center and Asian Society to unveil a new study calling for closer economic ties between India and Latin America.
"India's trade profile is going to change and that will provide great trade opportunities for Latin America," Shankar said.
The study looks into recent developments and economic trends in India and their possible impact for Latin America and the Caribbean.
The study argues that India, with an expected gross domestic product of 8.5 per cent this year, up from 6.9 per cent during the global financial crisis, has the potential to mirror the recent economic performance of China, which has become a major market for Latin American and Caribbean exports while cautioning that the increased imports could pose 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.
"Both have made extraordinary progress in finding their way back to the world economy. And the results are for everybody to see: posting high rates of growth even during the deep financial crisis. They have left behind years of relative stagnation," Moreno said.
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 per cent of this region's overall trade, compared with China's 7.7 per cent share.
"We have a lot to gain not only by cutting tariffs but by also reducing transport costs," said IDB economist Mauricio Moreira Mesquita, summarising one of the main conclusions of the study.
Arvind Panagarya, professor of economics at Columbia University and one of the panelists of the seminar, said India's trade potential with Latin America depends on how fast it will grow in the coming years.
