Latin America’s economy is poised to recover in 2021. Overall, it will grow close to 4% as compared to a negative growth of (-8%) in 2020. After logging its worst recession in recent history this year due to the Covid-19 blow, Latin America’s economy is poised to recover in 2021 as foreign demand and domestic activity revive.
Nomura also projected India to be the fastest growing Asian economy in 2021, with an estimate of 9.9% gross domestic product (GDP) growth in the coming calendar year.
Investment in LatAm:
As an overall market, Latin America is identified by four major regional markets: Mexico, South America, Central America and the Caribbean.
Indian companies have invested about 12 billion dollars in the region in energy, manufacturing, IT, pharmaceuticals, agro-chemicals, steel, mining, agribusiness and other sectors.
It is interesting that UPL, the largest Indian agrochemical company has more revenue in Latin America than in India. This is an opportune time for India to take the win-win economic partnership with Latin America to the next level.
Indian Automaker, Hero Moto Corp., has set its sights on Brazil and Mexico, two big motorcycle markets where the Indian company’s biggest rival will be its former partner, Honda Motor. Hero is developing flexi-fuel engines for Brazil — the country uses ethanol blended petrol — with an aim to enter that market by March 2019. Brazil is Latin America’s largest market, and the fourth largest globally, for two-wheelers with annual volumes of around two-million units, while Mexico sells more than half-a-million units a year.
India’s Sterlite Group, has won a contract to build 1,800km of power lines in northern Brazil, beating out international competitors to make what it claims would be the largest investment in Latin America by an Indian company. Combined with two other power transmission projects Sterlite won this spring, the new work will bring its investment in Brazil to $1 billion, the company said in a press release. It sees the project creating more than 5,500 jobs.
LatAm Investment in India:
Cinepolis is investing 1500 crores of Rupees targeting to set up 500 film screens in various cities in India. The company started operations in India in 2009 and already has 350 screens. They are the fourth largest player in Indian film exihibition market and the only foreign company.
Aje, a Peruvian company has bet on the Indian cola market with production of Big Cola brand of soft drinks in Maharashtra.
Grupo Bimbo announced in June 2017 a joint venture agreement with Ready Roti India Private Limited (“Ready Roti”), in which Grupo Bimbo will hold a 65% stake. Ready Roti, generates annual sales of approximately US$ 48 million, with four plants and more than 500 associates. Grupo Bimbo is one of the biggest Mexican MNCs and a global leader in bread business.
Marcopolo has a joint venture with Tata Motors for production of buses in Dharwad and Lucknow plants in India. Tata Marcopolo buses can be in all the major cities of India. Marcopolo investment is estimated at 90 million dollars.
Weg has invested 70 million dollars in a plant in Hosur to make electrical motors and generators. It has gained 25% share of the Indian market for large motors. It also exports motors from Hosur to China.
Dedini has entered into an MOU with Walchand Group for supply of equipments for ethanol production in India.
COFAP has set up a 50:50 JV in India with the Endurance Group for shock absorbers.
India-LatAm Trade:
India’s exports reached 13.2 billion dollars in 2019-20 (April-March) from 10 billion in 2015-16, according to the figures just released by the Commerce Ministry of India in July 2020.
Brazil came back this year to claim its position as the # 1 destination of India’s exports to the region, with 3.97 billion dollars, overtaking Mexico.
India was the seventh largest destination for Latin America’s global exports in 2019 and the third largest in 2018. India is the #1 market for their exports of vegetable oil, #3 for crude oil and #4 for gold. They perceive India as a large growing and transparent market and as the trusted land of yoga, meditation and Gurus at this stressful time of the Corona virus.
Go LatAm, as countries install business-friendly regimes –Bloomberg.